Binance, the world’s largest cryptocurrency exchange, has been ordered to repatriate and maintain within the country all its U.S. customers’ assets, ensuring Binance.US users can access funds while the exchange battles a lawsuit by federal regulators.
Key Takeaways
- The Securities and Exchange Commission (SEC) has secured an order from a federal court requiring Binance and its U.S. subsidiary to onshore all U.S. customer assets and facilitate withdrawals.
- The order ensures U.S. customers will have access to their funds while the crypto exchange battles an SEC lawsuit.
- Regulators have charged Binance and its CEO Changpeng Zhao with operating an unregistered securities exchange.
The ruling from the U.S. District Court for the District of Columbia resolves an SEC request to freeze Binance’s U.S. assets. The order requires BAM Trading Services Inc., BAM Management U.S. Holdings Inc., and the platform’s CEO Changpeng Zhao to repatriate assets held on behalf of U.S. customers and facilitate customer withdrawals.
“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,” said Gurbir S. Grewal, director of the SEC’s enforcement division.
The order falls short of the full asset freeze the SEC had requested. Binance can spend assets and funds in the ordinary course of business. Though the agreement requires Binance to provide regulators with oversight over that spending and the security of customer assets.
The SEC filed a lawsuit against Binance and its executives on June 5, accusing them of violating securities laws, misleading investors, wash trading, and earning $11.6 billion in fees from unregistered business operations. Users withdrew nearly $800 million from the platform and its U.S. subsidiary within a day of the SEC lawsuit.
Zhao called the SEC’s request to freeze Binance’s assets “entirely unwarranted” in a tweet Saturday morning, but added that “the disagreement over this request was resolved on mutually acceptable terms.”
Speaking at a crypto regulation event Friday, Grewal questioned accusations of “regulation by enforcement” against digital assets. Grewal called crypto a “perfect storm of investor risk.”
“What we’re doing is enforcing existing rules and regulations,” he said. “Folks just really don’t like the application of the rules to their particular projects.”
“We’ve seen plenty of DeFi products that are neither decentralized nor finance—but rather just straight fraud,” he added.
Source: https://www.investopedia.com/binance-to-repatriate-us-assets-avoid-full-freeze-7548719?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo