Only US employees allowed access to customer funds, Binance, SEC say
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The proposed agreement comes after the SEC sued Binance, its CEO and founder Changpeng Zhao, and Binance.US' operator last week.
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The Binance app icon is seen on a smartphone, Feb. 28, 2023, in Marple Township, Pa. (AP)
According to court records, Binance, Binance.US, and the American securities regulator reached an agreement to limit short-term access to customer assets to just Binance.US staff members.
According to the filings, the arrangement, which still requires approval from the federal judge presiding over the case, Binance.US will take measures to make sure that no Binance Holdings officials have access to the hardware wallets, private keys for its different wallets, or root access to Binance.US Amazon Web Services tools.
The proposed accord follows last week's dramatic escalation of US regulators' crackdown on the industry when the US Securities and Exchange Commission (SEC) sued Binance, its founder Changpeng Zhao, and Binance.US' operator. Later, the SEC filed a lawsuit against Coinbase, a significant US exchange.
Read: SEC charges Binance with violating securities laws
Binance.US and SEC did not respond to Reuters' request for comment right away.
Following the SEC's request for a court to order the freezing of its assets, Binance's US subsidiary last week stopped accepting dollar deposits and offered users until June 13 to withdraw their dollar cash.
Earlier in June, the world's largest cryptocurrency exchange was accused by US officials of breaking securities laws, which together amounted to "an extensive web of deception" and "calculated evasion of the law."
The SEC said that "defendants have enriched themselves by billions of US dollars while placing investors' assets at significant risk" in its complaint, which was submitted on Monday to a federal district court in Washington. According to the lawsuit, Binance allegedly made at least $11.6 billion (£9.3 billion) in income between June 2018 and July 2021, primarily from transaction fees.
Zhao, Binance Holdings, and two further Binance-affiliated companies, BAM Trading Services and BAM Management US Holdings, have all been charged with the 13 civil offenses. The main Binance platform announced in 2019 that it was leaving the US market, prompting the creation of Binance for US consumers, according to the SEC.
