Binance Continues Ops Under Agreement

Following a court agreement, the U.S. Securities and Exchange Commission (SEC) and Binance, the world's largest cryptocurrency exchange, have resolved their dispute, allowing Binance to continue its operations in the United States while defending against SEC allegations of fraud. Under the consent order filed on Saturday, the defendants involved in the lawsuit filed on June 5 have agreed to repatriate all assets held for the benefit of Binance's U.S. trading customers.

The SEC claims that Binance violated U.S. laws by functioning as an unregistered securities exchange. Coincidentally, it also levied similar charges against Coinbase, another leading cryptocurrency exchange. Apart from these allegations, Binance and its CEO, Changpeng Zhao, face additional charges related to diverting customer funds. This includes the concealment of commingling billions of dollars in investor assets and sending them to a third party owned by Zhao himself.

Consequently, the SEC sought to freeze the assets of Binance's U.S. platform. Under the order signed by federal judge Amy Berman Jackson in Washington, D.C., the defendants are prohibited from utilizing corporate assets for anything other than ordinary business expenses. The order also mandates SEC oversight on spending and forbids the destruction of records, as stated by the agency. As per the consent order, Binance is obliged to create new digital wallets for its U.S. customers and transfer assets to these wallets within a two-week timeframe.

The cryptocurrency industry has faced its share of scandals and market downturns. The SEC's crackdown is seen by industry leaders as an indication that U.S. regulators view cryptocurrency as incompatible with the traditional financial system. In August 2021, SEC chair Gary Gensler expressed concerns about the insufficient protection of investors in the crypto markets, likening them to the "Wild West." The decline in crypto prices last year, along with the collapse of several notable crypto companies, including FTX, resulted in substantial losses for investors.