Binance and SEC reach agreement to protect customer assets in the US

Cryptocurrency platform Binance has reached an agreement with the US Securities and Exchange Commission (SEC) to prevent a complete freeze of its assets in the US and ensure the safeguarding of customer funds within the country.

The consent order, signed by a US district judge on Saturday, comes in the midst of an extensive lawsuit filed by the SEC, which could potentially take months or even years to reach a resolution.

The lawsuit accuses Binance of operating an illegal securities exchange.

As part of the agreement, CEO Changpeng Zhao and other defendants have committed to repatriate assets held on behalf of US customers. The consent order emphasises on the protection and retention of these assets within the United States, preventing their relocation offshore.

"Through 13 charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure and calculated evasion of the law," stated SEC Chair Gary Gensler in a June statement regarding the lawsuit.

Furthermore, the agreement stipulates that Binance Holdings officials, including Zhao, will not have control over these assets. The order explicitly prohibits the transfer of assets to them, ensuring domestic control and security.

The consent order also imposes restrictions on the defendants' use of corporate assets, permitting expenditures only within the "ordinary course of business".

The SEC, on Saturday, announced that it has been granted oversight of these expenses to ensure compliance. The commission highlights the urgent need for such measures to safeguard investor assets, stating, "Given that Changpeng Zhao and Binance have control of the platforms' customers' assets and have been able to commingle customer assets or divert customer assets as they please, as we have alleged, these prohibitions are essential to protecting investor assets," as noted by Gurbir S. Grewal, Director of the SEC's Division of Enforcement. He further stated that the agreement ensures US customers can still withdraw their assets.

In addition to its actions against Binance, the SEC has recently filed a scathing complaint against another cryptocurrency enterprise Coinbase. In early June, the SEC requested a federal court to issue a temporary restraining order to freeze Binance's assets in the US.