Said agreement allows the cryptocurrency company to continue its operations, even while it fights fraud charges imposed by the commission.
In the latest turn of events, Binance.US has reached a settlement with the United States Securities and Exchange Commission (SEC), allowing the cryptocurrency company to continue operations.
Originally, the SEC had filed for an injunction on June 6, seeking a temporary restraining order on Binance.US’s operations, along with a freeze on all assets on the trading platform.
However, Presiding Judge Amy Jackson refused to grant the order, instead ordering both sides to reach an agreement that would protect consumer assets, without necessarily shutting down the exchange.
According to an SEC press release yesterday, both sides finally reached an understanding and obtained court approval for its implementation. However, the initial lawsuit is still in court.
On June 5, the SEC imposed 13 charges against Binance.US, its global partner Binance, and its founder, Changpeng Zhao, accusing all parties of running “a network of deception.” These charges included “operating unregistered exchanges, broker-dealers, and clearing agencies, misrepresenting trading controls and oversight on the Binance.US platform, as well as unregistered offering and selling of securities.”
Binance to Repatriate US Client Funds, Among Others
According to the SEC’s statement regarding its settlement with Binance.US and its co-defendants, all parties agree to “repatriate assets from the United States for the benefit of clients of the Binance.US crypto platform.”
Besides. Binance.US is mandated to hold all of its clients’ assets in the US pending a final order on the ongoing court case.
The US-based exchange is restricted from all kinds of expenses, except those for “ordinary course business expenses,” for which even the SEC must have oversight.
Finally, Binance.US is strictly prohibited from providing co-defendants, Binance or Changpeng Zhao, with any form of access to their client funds.
Commenting on this agreement, the Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, stated the need for these agreements reiterating the commission’s commitment to protecting US clients’ access to their investments.
“Since Changpeng Zhao and Binance are in control of client assets on the platforms, and have been able to combine client assets or divert client assets at will, as we have alleged, these bans are essential to protect investors’ assets,” he said.
“In addition, we ensured that US clients can withdraw their assets from the platform, while we work to resolve the alleged underlying misconduct and hold Zhao and the Binance entities accountable for their alleged violations of securities law.”
Binance.US Remains Resilient, Maintaining SEC Has No Evidence of Misuse of Funds
While acknowledging its recent settlement with the SEC, Binance.US has expressed a willingness to continually defend itself, stating that the SEC thus far had no evidence to support its allegations.
“There has never been any evidence presented by the SEC regarding the misuse of client assets. In fact, SEC lawyers admitted in court earlier this week, when questioned by the judge, that they had no evidence to suggest anything like this occurred,” Binance.US tweeted yesterday afternoon.
The US exchange also stated that its resolve remained intact, accusing the SEC of a “regulation by enforcement” tactic that had no place in the US justice system.
By Audy Castaneda
