In an intriguing development in the cryptocurrency space, Binance, Binance.US, and the Securities and Exchange Commission (SEC) have put forth a proposal aimed at securing customer funds amidst an ongoing lawsuit. The proposed agreement, announced late Friday, is awaiting approval from the overseeing federal judge.
As per the proposed terms, Binance.US, the U.S.-based crypto trading platform, will ensure that no officials from Binance Holdings – the global exchange – can access the private keys for its various wallets, hardware wallets, or root access to Binance.US’s Amazon Web Services tools. This move is designed to prevent potential misuse of funds.
Moreover, the proposal includes a commitment from Binance.US to disclose detailed business expense data, including anticipated costs, in the coming weeks. This step is significant as it would contribute to the transparency of the trading platform’s operations.
The proposal comes as a response to an SEC motion seeking to freeze all assets of Binance.US due to allegations of securities-related infringements. The SEC voiced concerns about the possibility of funds being moved offshore or records being destroyed if a temporary restraining order (TRO) was not granted. In response, Binance.US’s lawyers argued that such an asset freeze would be tantamount to a “death penalty.”
Judge Amy Berman Jackson, of the District Court for the District of Columbia, suggested during a hearing that the parties reach a mutual agreement rather than having her issue a TRO, citing a two-week limit for a more thorough hearing as insufficient given the more than 4,000 pages of exhibits already filed.
Further stipulations in the proposed agreement would see Binance.US creating new crypto wallets inaccessible to global exchange’s employees, providing additional information to the SEC, and agreeing to an expedited discovery schedule. It is also important to note that U.S.-based customers will still be allowed to withdraw funds during this period.
If approved, the proposal could address several of the SEC’s concerns as the broader lawsuit against Binance and Binance.US for allegedly offering and trading unregistered securities progresses. The proposal, however, doesn’t address the full breadth of the lawsuit.
Also Read: SEC and Binance.US Seek Agreement to Prevent Asset Freeze
