SEC: Binance and Affiliates Agree to Keep Customer Funds in US

Binance and two affiliates have agreed to hold in the United States the assets held for customers of Binance.US.

The Securities and Exchange Commission (SEC) reached an agreement on this matter with the defendants with which it is in litigation — Binance Holdings Limited, BAM Management US Holdings, BAM Trading Services and Binance CEO Changpeng Zhao, the SEC said in a Saturday (June 17) press release.

In addition, the order from the U.S. District Court for the District of Columbia also prohibits the two BAM entities from spending corporate assets outside the ordinary course of business, helping to ensure that customers will be able to withdraw their assets from the cryptocurrency exchange and that customers’ assets are protected during the litigation, the SEC said in the release.

“Given that Changpeng Zhao and Binance have control of the platforms’ customers’ assets and have been able to commingle customer assets or divert customer assets as they please, as we have alleged, these prohibitions are essential to protecting investor assets,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement said in the release.

Zhao said in a Saturday tweet that user funds “have been and always will be” safe on platforms that are affiliated with Binance.

“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,” Zhao said in the tweet.

Binance.US said in a Saturday tweet that the court-ordered agreement with the SEC allows the company to continue its ordinary course of business while continuing to defend itself in court against the SEC’s “unwarranted charges and ‘regulation by enforcement’ tactics.”

“There has never been any evidence presented by the SEC concerning misuse of customer assets,” Binance.US said in its tweet.

It was reported Tuesday (June 13) that Binance.US and the SEC had agreed to work toward a deal that would not involve freezing the assets of the company.

The SEC had asked for an asset freeze a week earlier, soon after filing its suit, Bloomberg News reported Tuesday.

The regulator filed 13 charges against Binance and Zhao on June 5, with the charges against the crypto asset trading platform including a variety of securities law violations.

Binance said at the time that it was “disappointed” with the SEC’s decision to file the charges and would defend its platform.