Binance and Binance.US, along with the Securities and Exchange Commission (SEC), have come to a preliminary agreement to ensure that only employees of Binance.US can have access to customer funds in the near future. The tentative agreement is awaiting approval from the federal judge presiding over the case.
Per the agreement, Binance.US is expected to implement measures that will prevent any officials from Binance Holdings, the global arm of the exchange, from accessing private keys to wallets, hardware wallets, or obtaining root access to the Amazon Web Services tools used by Binance.US.
Additionally, Binance.US is slated to release detailed data regarding its business expenses, which will include estimated costs, in the upcoming weeks.
This agreement is in response to the SEC’s attempt to freeze all assets of Binance.US as the regulator proceeds with a securities-related case against the exchange.
The SEC had expressed concerns regarding the possibility of funds being transferred overseas or records being eliminated if the agency was not granted a temporary restraining order.
Attorneys representing Binance.US contested the move, stating that freezing all assets would equate to a “death penalty."
In response, District Court Judge for the District of Columbia Amy Berman Jackson conveyed to the involved parties that it would be more beneficial if they could reach an agreement on the proposed stipulation instead of her having to issue a restraining order.
Jackson stated that such an order would have a two-week duration, which would not provide adequate time for preparation considering the over 4,000 pages of exhibits that have been submitted to date.
Jackson stated during a hearing earlier this week, “Two weeks would give insufficient time to prepare, given the more than 4,000 pages of exhibits the parties have already filed.”
The tentative agreement also states that Binance.US will establish new cryptocurrency wallets to which no global employees will have access, share additional data with the SEC and commit to a fast-tracked discovery schedule. U.S. customers will still have the capability to withdraw funds during this period.
Notably, while the provisional agreement addresses some of the SEC's immediate concerns, it doesn't touch upon the broader lawsuit that the SEC has initiated against Binance and Binance.US.
The lawsuit, which was filed last week, accuses them of engaging in the offering and trading of unregistered securities, alongside allegations of substantial mingling of funds and other malpractices.
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