Home Finance & Fintech Binance US Made a ‘Burdensome’ Deal With SEC, Former SEC Official Says

Binance US Made a ‘Burdensome’ Deal With SEC, Former SEC Official Says

by delta
0 comment

According to a consent order Binance US and the Securities and Exchange Commission have reached an agreement that prevents the freezing of exchange assets in exchange for enhanced transparency and oversight, as stated in an approved consent order.

The consent order, endorsed by United States District Judge Amy Berman Jackson, follows an emergency order by the SEC last week, which called for the freezing of assets held by Binance.US holding companies and the repatriation of assets to the United States.

Despite the agreement, asset repatriation remains a requirement, with Binance ensuring that two Binance.US holding companies maintain possession, custody, and control of all fiat currency and crypto assets deposited, held, traded, or accrued by customers within the United States.

Binance CEO Changpeng “CZ” Zhao shared a concise statement on Twitter, assuring customers that user funds are and will continue to be secure on all Binance-affiliated platforms.

“While we firmly believe that the SEC’s request for emergency relief was entirely unwarranted, we are pleased that the dispute surrounding this request has been resolved on mutually acceptable terms,” he expressed.

John Reed Stark, a cybersecurity consultant and former chief of the SEC Office of Internet Enforcement, described the agreement as “unprecedented, exhaustive, and onerous.”

Stark further remarked on Twitter, stating, “This consent order will be one of the most demanding, awkward, inconvenient, and extensive crypto-related orders in SEC history. The SEC has been assigned a role similar to that of an independent consultant for Binance, a remedy frequently granted to the SEC after prevailing in an enforcement action.”

As part of the agreement, Binance is granted 45 days to provide the SEC with a comprehensive list of all accounts or wallets under its management since December 1, 2022, including associated financial institutions and account numbers. Additionally, Binance must furnish a record of asset transfers exceeding $1,000 in value during the same period, including recipient names and reasons for the transfers.

Addressing the SEC’s concerns regarding Binance US solvency, the agreement necessitates the provision of information on any encumbrances or limitations that could impede transfer or withdrawal by customers. Furthermore, it requires verification of sufficient assets to fulfill customer liabilities or meet customer claims for assets held on their behalf within ten calendar days of receiving the request.

Binance.US must also ensure that neither Binance, its CEO Changpeng Zhao, nor any entities owned or controlled by Zhao are granted access or control over the assets.

Finally, Binance.US is obligated to submit monthly reports to the SEC, covering ordinary course business expenses.

All of these provisions are established as the SEC’s civil action progresses to trial, during which Judge Jackson permits 90 days of expedited discovery by the SEC.

Stark cautions, “Should any Binance defendant violate any provision of this order, the US Department of Justice could intervene and file charges related to obstruction. Therefore, Binance must not fail, for it would be at its own peril.”

You may also like

Leave a Comment


Delta-Compliance.com is a premier news website that provides in-depth coverage of the latest developments in finance, startups, compliance, business, science, and job markets.

Editors' Picks

Latest Posts

This Website is operated by the Company DELTA Data Protection & Compliance, Inc., located in Lewes, DE 19958, Delaware, USA.
All feedback, comments, notices of copyright infringement claims or requests for technical support, and other communications relating to this website should be directed to: info@delta-compliance.com. The imprint also applies to the social media profiles of DELTA Data Protection & Compliance.

Copyright ©️ 2023  Delta Compliance. All Rights Reserved

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?
Update Required Flash plugin