In a groundbreaking development, Binance.US and the Securities and Exchange Commission (SEC) have reached an agreement, resulting in greater transparency and oversight for the popular cryptocurrency exchange. The consent order was approved by United States District Judge Amy Berman Jackson after the SEC filed an emergency order last week, demanding the freezing of assets held by Binance.US holding companies and repatriation of assets to the U.S.
This unprecedented agreement, labeled as “exhaustive and onerous” by John Reed Stark, former chief of the SEC Office of Internet Enforcement, still necessitates asset repatriation. Binance has agreed to ensure that its U.S. holding companies maintain possession, custody, and control of all fiat currency and crypto assets belonging to customers in the United States.
Binance CEO Changpeng “CZ” Zhao reassured customers on Twitter that “user funds have been and always will be safe and secure on all Binance-affiliated platforms.” Despite believing that the SEC’s emergency relief request was unnecessary, Zhao expressed satisfaction with the resolution reached on mutually acceptable terms.
The consent order imposes significant burdens on Binance, granting the SEC a monitoring role similar to that of an independent consultant – a remedy typically awarded to the SEC after winning an enforcement action. Within 45 days, Binance must supply the SEC with a comprehensive list of relevant accounts and wallets, along with details of asset transfers exceeding $1,000 in value.
Additionally, the agreement addresses the SEC’s concerns regarding Binance.US solvency by demanding information on any encumbrances or limitations that could affect customers’ ability to transfer or withdraw assets. Furthermore, Binance.US must ensure that no access or control of assets is granted to Binance or its CEO, Changpeng Zhao.
Lastly, Binance.US is required to submit monthly reports to the SEC covering its ordinary course business expenses. Judge Jackson has allowed for 90 days of expedited discovery by the SEC while the civil action proceeds to trial. Stark warns that any violation of the order can lead to obstruction-related charges filed by the U.S. Department of Justice.
The implications of this agreement are notable, as the SEC gains significant oversight into one of the largest cryptocurrency exchanges in the world. While it may seem overly restrictive, it could also help improve transparency and security within the crypto industry. However, the impact on Binance’s operations and what this means for the future of cryptocurrency exchanges and regulations remains to be seen.
Source: Decrypt
