According to a recent Bloomberg report, Binance.US and the U.S. Securities Exchange Commission (SEC) might reach a compromise agreement. The agreement, if reached, could avoid a complete asset freeze. The SEC had first filed charges against Binance.US and some related companies on June 5. In response, the SEC requested a restraining order and asset freeze on June 8.
Judge Amy Berman Jackson’s statement
During a recent hearing, Judge Amy Berman Jackson stated that freezing all of Binance.US’s funds would have severe consequences. Therefore, she would not approve an asset freeze until both parties reach a compromise agreement with a magistrate judge. This statement came after the SEC’s initial order requested Binance.US’s funds to be frozen and repatriated.
According to Yahoo Finance, both parties have submitted a modified order. The modified order would permit Binance.US’s parent companies, BAM Trading and BAM Management, to keep control of user fiat and crypto assets for the sole purpose of facilitating customer redemptions. The order would also allow BAM companies to pay ordinary business expenses. However, the SEC or the court would decide on specific details related to this in the future.
Requirements of the revised order
The revised order requires BAM companies to transfer cryptocurrency funds to newly created wallets that are solely controlled by U.S. company members. Additionally, BAM companies would be required to provide SEC counsel with details related to accounts, balances, customers, and other information. These requirements relate to one of the SEC’s primary concerns. The SEC worries that Binance CEO Changpeng Zhao and other executives and companies that exist outside of the U.S. have access to U.S. customer funds.
Service change and user impact
Binance.US previously claimed that the SEC’s request led to a breakdown in its relationships with banking partners. As a result, Binance.US paused USD withdrawal channels and will only work with crypto as early as June 13. Currently, all USD withdrawal methods are disabled on the platform’s status page, except for ACH transfers, which are labeled as “degraded.” It is essential to note that this service change only affects Binance.US and American customers. It does not affect users of Binance.com or other global Binance users.
In summary, Binance.US and the SEC could reach a compromise agreement that would avoid a complete asset freeze. The modified order would permit BAM companies to keep control of user fiat and crypto assets for facilitating customer redemptions and pay ordinary business expenses. However, the revised order requires BAM companies to transfer cryptocurrency funds to newly created wallets solely controlled by U.S. company members. Additionally, BAM companies would have to provide SEC counsel with details related to accounts, balances, customers, and other information. This service change only affects Binance.US and American customers, not users of Binance.com or other global Binance users.