Binance.US and the Securities and Exchange Commission (SEC) have come to terms addressing the regulator’s request for a temporary restraining order on the cryptocurrency exchange.
Binance.US and SEC come to terms
Approved by Judge Amy Berman Jackson early Saturday morning, the deal calls for Binance.US to maintain possession of all customer fiat and crypto at all times. Assets will be kept on US soil, and the exchange must ensure that none of its non-US employees have access to private keys, wallets or even root access to its Amazon Web Service tools.
In the coming two weeks, Binance.US will setup a series of new wallets and private keys that will be exclusively owned by the US’ exchange employees.
The exchange will be permitted to transfer its users’ crypto assets to custodians such as BitGo or Aegis as long as no Binance entities outside the United States have access to or control over funds.
Two week grace period
In the next 20 days, Binance.US will provide details to the SEC regarding all its customer accounts and wallets regarding KYC-ed US users who transacted on Binance.com between 2019 and 2022.
Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, said the provisions are ‘essential’ to protect investors, in a press 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.”
Binance.US tweeted about the deal that the struggle with the regulator had harmed its business and reputation, and that the exchange remains committed to fighting the agency’s “regulation by enforcement” techniques.
Regulatory hostilities
Such techniques include the ongoing lack of regulatory clarity and delays to properly categorise assets in the emerging digital asset space. The criticisms levied against the SEC’s conduct are far-reaching, uniting swaths of crypto enthusiasts in protest against regulatory overreach.
Founder and CEO of crypto analytics platform Messari, Ryan Selkis, interpreted a CoinDesk article to mean that “tokenisation will only be allowed at the Wall Street firms that own our financial regulators like Michael Hsu and Gary Gensler”.
The mask is coming off.
“Tokenization is the future,” but it will only be allowed at the Wall Street firms that own our financial regulators like Michael Hsu and Gary Gensler, says owned regulator at the American BANKERS Association event. pic.twitter.com/CzZaEupRsn
— Ryan Selkis 🪳 (@twobitidiot) June 16, 2023
Ryan’s comments underline a growing appreciation that finance-speak terms such as ‘investor protection’ are merely a euphemism for oversight and control over financial markets.
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