Binance reaches deal with US government to avert shutdown

SAN FRANCISCO – The Securities and Exchange Commission (SEC) reached a deal with Binance late on Friday that would allow the world’s largest cryptocurrency exchange to keep operating in the United States and safeguard customer assets as the company battles a government lawsuit.

After filing fraud charges against Binance on June 5, the SEC

moved to freeze the firm’s US assets

in a move that the exchange’s lawyers said would put it out of business in the US.

But in a court filing on Friday, the SEC said the two sides had reached a compromise after several days of court-ordered mediation. On Saturday morning, Judge Amy Berman Jackson, who is overseeing the case in federal court in Washington, signed off on the deal.

Under the agreement, funds belonging to customers of Binance.US, an affiliate of the company’s larger offshore exchange, would go into special digital repositories accessible only to the US exchange – and not to Binance’s international operation, or its founder Zhao Changpeng.

The deal stipulates that Binance.US can transfer company assets “solely to make payments for expenses or to satisfy obligations incurred in the ordinary course of business”.

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

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

In recent months, the SEC has embarked on an aggressive industry crackdown, suing Binance

as well as its largest US rival, crypto exchange Coinbase.

With the regulatory pressure intensifying, some crypto companies have vowed to fight in court, while others are exploring options outside the US, decamping to countries with more lenient regulations.

The agreement to safeguard customer assets in the US would resolve the first of what could be many legal skirmishes to come. The SEC, in a sweeping civil fraud lawsuit, charged Binance and Mr Zhao with mishandling customers’ deposits, lying to regulators and allowing market manipulation to proliferate on the exchange. NYTIMES