SEC-Binance US Agreement: Safeguarding User Assets and Addressing Mismanagement Allegations
In a significant development, the United States court has approved the agreement between Binance.US and the U.S. Securities and Exchange Commission (SEC). This deal not only establishes a cooperative framework between the crypto exchange and the regulatory authority but also includes crucial measures to protect user assets.
Under the terms of the agreement, Binance global officials are explicitly prohibited from accessing private keys of wallets, hardware wallets, or obtaining root access to Binance.US’s Amazon Web Services tools. This provision ensures the utmost security and privacy of user funds.
Binance.US has staunchly refuted the allegations of funds mismanagement put forward by the SEC, emphasizing that no evidence has ever been presented to substantiate such claims. In fact, during the court proceedings, SEC lawyers acknowledged the absence of any evidence suggesting any misappropriation of customer assets.
John Reed Stark, former chief of the SEC’s Office of Internet Enforcement, commented on the case via Twitter, highlighting a particularly interesting provision within the agreement. This provision pertains to the repatriation of certain assets back to the United States, reinforcing the jurisdictional control over these funds.
The agreement explicitly states that all fiat currency and crypto assets deposited, held, traded, or accrued by customers must be repatriated to the United States, transferred to BAM Trading (the parent company of Binance.US), and maintained under its possession, custody, and control. This measure strengthens the regulatory oversight and ensures transparency in handling user assets.
Furthermore, Binance.US is required to take immediate action to provide a verified written accounting of accounts associated with BAM entities that have a value exceeding $1,000. This step aims to enhance financial accountability and promote responsible practices within the organization.
The SEC had filed an emergency motion for a temporary restraining order against Binance.US, accusing Binance CEO Changpeng “CZ” Zhao of accessing Binance.US customer funds. The regulator specifically alleged that Zhao had moved $12 billion through an entity he controlled, named Merit Peak.
However, both Binance.US and Zhao vehemently denied any mishandling of funds in a joint memorandum submitted prior to the hearing on the restraining order. They pointed out the SEC’s failure to identify a single instance where customer funds on Binance.US had been misused, strongly challenging the allegations.
This approved agreement between Binance.US and the SEC marks a pivotal moment in addressing the allegations and establishing a cooperative relationship focused on protecting user assets and ensuring compliance with regulatory requirements.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.