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Binance Restricts US Customer Funds Access to Local Employees: New SEC Agreement

A recent agreement between cryptocurrency exchange Binance, Binance US, and the US securities regulator could redefine the handling of customer funds.

Binance logo
Binance logo

The Newly Proposed Agreement

Binance, Binance US, and the US securities regulator have forged an agreement that will permit only US-based employees of Binance US to access customer funds in the near term, court documents reveal. However, the federal judge presiding over the case has yet to approve the agreement.

Implications for Binance Officials

In accordance with this new agreement, Binance.US will be implementing measures to prevent any officials from Binance Holdings from accessing the private keys to its various wallets and hardware wallets, or from gaining root access to its Amazon Web Services tools, as outlined in the court filings.

The development of this agreement follows the US Securities and Exchange Commission's (SEC) legal action against Binance, its CEO and founder Changpeng Zhao, and Binance US's operator. This marked a significant increase in regulatory oversight on the industry by US authorities. After initiating the lawsuit against Binance, the SEC also targeted major U.S. exchange Coinbase.

Waiting for Official Responses

Reuters' requests for comment from both Binance US and the SEC have yet to receive a response.

Impact on Binance’s US Operations

Last week, Binance's US affiliate suspended dollar deposits and requested customers to withdraw their dollar funds by June 13, as a result of the SEC petitioning a court to freeze its assets.

Looking Forward

In addition to limiting access to customer funds, the proposed agreement stipulates that Binance US will develop new crypto wallets that will be inaccessible to the global exchange's employees. It will also provide the SEC with more information and agree to a fast-tracked discovery schedule, according to the court filings.