The US Securities and Exchange Commission and Binance have reached an out-of-court settlement that allows the world’s largest cryptocurrency exchange to continue operating in the United States as it battles SEC fraud charges.
ByFrank Bajaj Associated Press
FILE – Binance app icon is seen on a smartphone on February 28, 2023 in Marple Township, Pa. The US Securities and Exchange Commission and Binance reached a settlement in court on Saturday, June 17, that allows the world’s largest cryptocurrency exchange to open its doors. The exchange continues to operate in the United States as it battles SEC fraud charges. (AP Photo/Matt Slocum, File)
The Associated Press
The US Securities and Exchange Commission and Binance have reached a settlement in court that allows the world’s largest cryptocurrency exchange to continue operating in the United States as it battles SEC fraud charges.
Under a consent order filed on Saturday, the defendants in the June 5 lawsuit agreed to return all assets held for the benefit of Binance’s US trading customers.
The SEC alleges that Binance broke US law by operating as an unregistered securities exchange. It filed almost identical charges against Coinbase, the world’s other top cryptocurrency exchange, almost simultaneously.
But Binance and its CEO Changpeng Zhao faced additional allegations of diverting customer funds – hiding the fact that it was mixing billions of dollars in investor assets and sending them to a third party that also belonged to Zhao.
As a result, the SEC asked to freeze the assets of Binance’s US platform.
The order, signed by federal judge Amy Berman Jackson of Washington, DC, bars the defendants from spending corporate property other than for ordinary business expenses. It also requires SEC oversight of any spending and prohibits defendants from destroying records, the agency said in a statement.
The consent order obliges Binance to create new digital wallets for US customers and transfer assets within two weeks.
The cryptocurrency industry has been hit by scams and market downturns. Industry leaders say the SEC’s action indicates that the US regulator believes cryptocurrencies have no place in the traditional financial system.
In August 2021, SEC Chairman Gary Gensler said that investors were not adequately protected in crypto markets, calling them more like the “Wild West”. ,
Investors lost billions of dollars last year as crypto prices plummeted, as well as the demise of several notable crypto companies, including FTX.
