Binance Reaches Deal With SEC To Prevent US Shutdown

July 6, 2023 10:59 pm Comments

Most recently, it was revealed that a deal has been made between Binance and the SEC which would allow Binance to continue operating within the US despite the lawsuit that was started.

This is seen as positive news for crypto investors and traders as many members of the community rely on Binance to access the digital assets market.

The SEC had previously filed a lawsuit against Binance on June 5 which many thought would freeze all of Binance’s assets within the country.

With this new compromise, customer assets within would be specifically separated from Binance’s international operation.

So far, this seems like this is a move that would not affect US customers from a customer experience perspective.

Nytimes reports:

Binance said on Saturday, “Although we maintain that the S.E.C.’s request for emergency relief was entirely unwarranted, we are pleased that the disagreement over this request was resolved on mutually acceptable terms.”

The S.E.C.’s director of enforcement, Gurbir Grewal, said in a statement on Saturday, “We ensured that U.S. customers will be able to withdraw their assets from the platform while we work to resolve the alleged underlying misconduct.”

The dispute over Binance’s assets was part of a high-stakes legal battle that could determine the future of the crypto industry in the United States.

In recent months, the S.E.C. has embarked on an aggressive industry crackdown, suing Binance as well as its largest U.S. rival, the crypto exchange Coinbase. With the regulatory pressure intensifying, some crypto companies have vowed to fight in court, while others are exploring options outside the United States, decamping to countries with more lenient regulations.

The lawsuit that the SEC is initiating against Binance includes many different allegations such as mishandling customer deposits and market manipulation.

The founder of the exchange, Changpeng Zhao, was also under investigation by the SEC so it is quite likely that this is a lawsuit that will drag on for some time.

Binance is not the only crypto exchange that has been targeted by the SEC recently as Coinbase has also been targeted for dealing with “unregistered securities”.

The SEC’s strategy of regulating the crypto industry through enforcement actions and lawsuits has been criticized heavily by the crypto community.

There will be a lot of push needed from Congress in the future in order to change the SEC’s behavior and the way it regulates crypto. concludes:

Binance.US must also make sure that no access or control of assets is given to Binance, its CEO Changpeng Zhao, “or any Zhao- owned or Zhao-controlled entity.”

Finally, Binance.US will have to provide the SEC monthly reports covering its “ordinary course businesses expenses.”

All of this is established as the SEC’s civil action proceeds to trial, for which Judge Jackson provides 90 days of “expedited discovery” by the SEC.

“Should any Binance defendant violate any provision of this order, US DOJ could step in and file obstruction-related charges,” Stark observed. “So fail not at your peril, Binance.”

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