A federal court has set a deadline for Binance.US and the Securities & Exchange Commission (SEC) to find a compromise that prevents a full asset freeze for the exchange. The legal action initiated by the SEC led to the request for a temporary restraining order and asset freeze. Both parties have until June 15th to reach an agreement that could enable Binance to maintain its US operations.
US District Judge Amy German Jackson has encouraged the SEC to find a middle ground with Binance.US, to avoid potential damage to the cryptocurrency markets. While advocating for negotiations, the court has also asked Binance to submit a list of regular expenses by June 14th. Binance.US suspended US dollar deposits last week in anticipation of a court session.
The SEC proposed a new deal on Tuesday that would relax limitations on a total freeze of assets, providing some guarantees to Binance affiliate BAM Trading, which runs Binance US. These guarantees would allow the firm to maintain control over its US assets for the payment of salaries and the fulfillment of financial obligations. Furthermore, BAM Trading would be able to assist customers in redeeming their crypto assets without restrictions.
However, Binance CEO Changpeng Zhao would not have access to the US exchange’s assets or wallets, according to the proposed order. Additionally, the SEC requested that Binance bring back customer assets to the US, where independent entities would have control over these assets and manage customer redemptions.
The SEC’s claims that two foreign entities controlled by Zhao, Sigma Chain and Merit Peak, were used to commingle billions in customer funds with Binance’s own funds are at the heart of the lawsuit. The judge reportedly expressed concerns about the potential consequences of a complete shutdown, not just for the company, but for the wider crypto market as well. However, the SEC’s proposal is still awaiting approval.
With both parties racing against the deadline, the outcome of this agreement has significant implications on Binance.US’s future operations and the wider cryptocurrency market, affecting users and investors alike. The case highlights the regulatory pressure that cryptocurrency exchanges face, emphasizing the importance of striking a balance between regulation and innovation. As the situation unfolds, the wider crypto community awaits updates and the outcome of the ongoing negotiations.
Source: Blockworks
