United States Judge Amy Berman Jackson approved on June 17 an agreement between Binance.US, Binance, and the Securities and Exchange Commission (SEC), dismissing a previous temporary restraining order (TRO) that would freeze all Binance.US assets.
Judge Jackson said on June 14 she would prefer the parties reach an agreement on their own rather than have her rule. The sides reportedly reached an agreement on June 16.
"We are pleased to inform you that the Court did not grant the SEC’s request for a TRO and freeze of assets on our platform which was clearly unjustified by both the facts and the law," Binance.US said on Twitter.
As per the approved agreement, only Binance.US employees will have access to client funds until the litigation is resolved. U.S.-based customers will retain the ability to withdraw funds throughout this period.
We want to provide an update on the current battle https://t.co/AZwoBOh0gq finds itself in with the SEC. We are pleased to inform you that the Court did not grant the SEC’s request for a TRO and freeze of assets on our platform which was clearly unjustified by both the facts and…
— Binance.US (@BinanceUS) June 17, 2023
The deal between the crypto exchange and the U.S. regulator also prevents any access by Binance global officials to private keys of wallets, hardware wallets, or root access to Binance.US’s Amazon Web Services tools.
"There has never been any evidence presented by the SEC concerning mis-use of customer assets. In fact, the SEC lawyers conceded in Court earlier this week, when asked by the Judge, that they had no evidence suggesting that any such thing had occurred," wrote Binance.US regarding allegations of funds mismanagement.
In a Twitter comment on the case, former chief of the SEC's Office of Internet Enforcement John Reed Stark noted that the agreement includes a "particularly interesting provision" about the repatriation of certain assets to the U.S.
“Defendants shall repatriate to the United States, transfer to BAM Trading, and confirm that BAM Trading maintains possession, custody and control in the United States of all fiat currency and crypto assets that are deposited, held, traded, or accrued by customers [...]," reads the agreement.
Additionally, the deal asserts that Binance.US must take immediate action to ensure "a verified written accounting" of accounts related to BAM entities valued greater than $1,000.
The SEC filed an emergency motion for a temporary restraining order on Binance.US on June 6, after accusing Binance CEO Changpeng “CZ” Zhao of having access to Binance.US customer funds in a lawsuit. The regulator alleged Zhao moved $12 billion of Binance’s funds through an entity he controlled called Merit Peak.
Ahead of the hearing on the restraining order, Binance.US and Zhao submitted a joint memorandum denying that funds were ever mishandled. According to them, the SEC has been unable to identify a single instance where Binance.US customer funds have been misused.
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