Binance.US and the Securities and Exchange Commission have reached an agreement that avoids a total asset freeze at the cryptocurrency exchange while the SEC’s lawsuit against it proceeds.
Under the deal announced Saturday, Binance Holdings, BAM Management US, BAM Trading Services and founder Changpeng “CZ” Zhao will repatriate Binance.US customer assets to the U.S.
Binance.US customers are permitted to withdraw funds from the platform, according to the order filed by US judge Amy Berman Jackson in Washington federal court.
Read the court order here.
Read the SEC statement here.
In its June 5 lawsuit, the SEC had accused Binance and Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules. It also asked for the repatriation of crypto belonging to US customers, a request made when there is a risk assets may be lost or concealed.
See: Bitcoin drops after SEC files src3 charges against Binance, founder Changpeng Zhao
The deal is in response to an SEC motion to freeze all of Binance.US’s assets while the securities-related charges are being considered by the court. The SEC said it was concerned that funds could be moved offshore or records destroyed if it was not granted a temporary restraining order.
However, Judge Amy Berman Jackson, of the District Court for the District of Columbia, told the parties that it would be better for them to come to an agreement.
Binance, Binance.US and the SEC agreed to ensure that only Binance.US employees could access customer funds in the short term, according to the court documents. Under the agreement Binance.US will take steps to make sure that no Binance Holdings officials have access to private keys for its various wallets, hardware wallets or root access to Binance.US’s Amazon Web Services tools, the filings showed.
See also: Should you be worried if your crypto is in Binance.US or Coinbase?
Binance.US says customer assets are safe and argued that blocking the flow of all funds would cripple its business.
The U.S. affiliate of Binance halted dollar deposits last week and gave customers until June src3 to withdraw their dollar funds, after the SEC asked a court to freeze its assets.
Binance.US on Saturday said it was “pleased” that the disagreement over the SEC’s request was resolved on mutually acceptable terms, though it maintains that the call for a freeze was “entirely unwarranted,” Bloomberg reported.
See also: BlackRock is applying for a spot bitcoin ETF. Here’s why it matters to the crypto industry.