Clearance for SEC-Binance.US Accord
In a landmark decision, United States Judge Amy Berman Jackson sanctioned an agreement between Binance.US, Binance, and the Securities and Exchange Commission (SEC). The verdict delivered on June 17 effectively nullifies a preceding temporary restraining order (TRO) aimed at freezing all assets owned by Binance.US.
Parties' Agreement Replaces Court Ruling
Prior to the verdict, on June 14, Judge Jackson had expressed a preference for the involved parties to negotiate a settlement themselves rather than having her make a decision. Reportedly, an agreement was achieved on June 16.
Binance.US Relieved over Ruling
Commenting on the verdict, Binance.US took to Twitter to express their relief, stating that the court did not uphold the SEC’s request for a TRO and a freeze of their assets, a move they considered unwarranted by both facts and legal considerations.
Client Funds Safety: A Priority
According to the approved agreement, only Binance.US employees are permitted to access client funds until the litigation is fully settled. Importantly, US customers will still be able to withdraw funds throughout the litigation period.
Restrictions on Access to Private Keys
In an intriguing twist, the agreement also bars any access by Binance's global officials to the private keys of wallets, hardware wallets, or root access to Binance.US's Amazon Web Services tools.
Binance.US Refutes Misuse Allegations
Binance.US has strongly rebutted allegations of mismanaging funds. They emphasized that no evidence of customer asset misuse was presented by the SEC. In fact, they reported that SEC lawyers conceded in court that they lacked evidence to support any such accusation.
Interesting Clause on Asset Repatriation
John Reed Stark, former chief of the SEC's Office of Internet Enforcement, pointed out a "particularly interesting provision" in the agreement regarding the repatriation of certain assets to the US.
Regulatory Oversight and Transparency
The deal also insists that Binance.US must promptly ensure a "verified written accounting" for accounts related to BAM entities valued over $1,000.
SEC's Accusations against Binance CEO
The SEC had previously filed an emergency motion for a TRO on Binance.US on June 6, following allegations that Binance CEO Changpeng “CZ” Zhao had access to Binance.US customer funds. The regulator alleged Zhao transferred $12 billion of Binance’s funds via a company he controlled, known as Merit Peak.
Denial of Funds Misuse
Ahead of the hearing regarding the restraining order, both Binance.US and Zhao submitted a joint memorandum denying that funds were ever mishandled. They argued that the SEC was unable to identify any instance of Binance.US customer funds being misused.