As per reports, Binance, Binance.US, and the United States Securities and Exchange Commission (SEC) have reportedly reached an agreement on June 16th to temporarily limit access to customer funds exclusively to Binance.US employees.
The proposed agreement, which is subject to approval from the overseeing federal judge, outlines various measures for Binance.US. These measures aim to prevent any access by Binance officials to private keys of wallets, hardware wallets, or root access to Binance.US’s Amazon Web Services tools. Additionally, the agreement requires the U.S.-based crypto trading platform to disclose comprehensive information on business expenses, including estimated costs, in the coming weeks.
The agreement is a direct response to a motion filed by the SEC, which sought to freeze all of Binance.US’s assets during the ongoing legal proceedings. The SEC expressed concerns that without a granted temporary restraining order, there could be a risk of funds being transferred offshore or crucial records being intentionally destroyed.
However, Binance.US’s legal representatives strongly opposed the idea, arguing that a complete freeze on all assets would essentially be like administering an excessively severe “death penalty” on the company.
During a previous hearing, U.S. district court judge Amy Berman Jackson advised the parties involved to consider reaching an agreement on a proposed stipulation rather than relying on the court to issue a restraining order. The judge emphasized that a temporary restraining order has a limited duration of two weeks, which might not be sufficient for a comprehensive hearing, especially given the substantial volume of exhibits submitted, totaling over 4,000 pages.
The proposed agreement also includes additional provisions. For example, Binance.US will create new crypto wallets that will only be accessible to employees of Binance.US and not other Binance entities. Furthermore, Binance.US commits to providing additional information to the SEC and agrees to an accelerated discovery schedule. Importantly, U.S.-based customers will still be able to withdraw funds during this period.
If accepted, the proposed agreement will partially address the SEC’s concerns while the broader lawsuit continues. The SEC recently filed a lawsuit against Binance and Binance.US, accusing them of trading unregistered securities and engaging in poor practices that commingled funds. However, it’s important to note that the proposed agreement does not cover the broader lawsuit.