Binance and SEC Propose to Limit Fund Access to U.S. Staff
Binance, Binance.US, and the Securities and Exchange Commission (SEC) have reached a proposed agreement to restrict customer funds exclusively to Binance.US employees in the short term.
Binance recently filed a court request to deny the U.S. SEC’s request for a temporary restraining order (TRO), as it would have severe consequences for the company’s operations. The SEC expressed concerns that without a TRO, funds could be transferred overseas or crucial documents could be erased.
The judge assigned both the SEC and Binance to a magistrate judge to negotiate a compromise that would protect customer funds without forcing the exchange to shut down completely. This approach allows the exchange to prevent the freezing of all Binance.US‘s assets.
Binance.US will implement precautionary measures to ensure that no personnel from Binance Holdings have access to private keys for its various wallets, hardware wallets, or root access to its Amazon Web Services (AWS) tools. Additionally, the crypto trading platform will publish comprehensive information about its operational expenses, including anticipated costs, in the coming weeks.
The proposed agreement also includes provisions that require Binance.US to create new crypto wallets inaccessible to employees of its global exchange unit, provide additional information to the SEC, and agree to an expedited discovery timeline.
During this period, customers based in the U.S. will still be able to withdraw their funds.
No Relief in Sight for Now
The SEC has charged Binance, Binance.US, and Zhao with alleged violations of U.S. securities laws. The regulatory authority claims that the companies operated as an unregistered securities exchange, broker, and clearinghouse, enabling U.S. consumers to trade tokens.
The SEC also alleges that Binance and CZ had access to customer funds, moving millions to CZ-owned enterprises such as Merit Peak and Sigma Chain.
Binance has already denied these allegations. The proposed agreement still requires approval from the federal judge overseeing the case.
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