by Baranjot Kaur and Akanksha Khushi

(Reuters) – Crypto-asset exchange Binance and Binance.US have reached an agreement with the Securities and Exchange Commission (SEC) to ensure that U.S. client assets remain in the United States until that a high-profile lawsuit filed this month by the regulatory agency is resolved.

The agreement, disclosed in court documents filed late Friday, has yet to be approved by the federal judge overseeing the litigation. To ensure that US client assets do not go overseas, the agreement only allows Binance.US employees to access them.

The SEC on June 5 filed a lawsuit against Binance, its CEO and Founder Changpeng Zhao, and the operator of Binance.US, alleging that Binance artificially inflated trading volumes, misappropriated customer funds, failed to restricting access to its platform for US clients and misleading investors about its market surveillance controls.

This complaint, as well as that filed the next day by the SEC against the American company Coinbase, which is also one of the largest cryptocurrency exchanges in the world, constitutes a spectacular escalation of the repression exerted by the American regulatory authorities. against the industry.

Under the agreement, which does not resolve the SEC’s legal challenge, Binance.US will take steps to ensure that no Binance Holdings official has access to the private keys of its various wallets, hardware wallets, or root access to Amazon Web Services tools from Binance.US, as set forth in court filings.

The SEC said in a statement on Saturday that the emergency relief order obtained for Binance.US customers would protect their assets and ensure they could continue to withdraw them.

“Given that Changpeng Zhao and Binance have control over the platforms’ client assets and have been able to mix client assets or divert them as they please, these prohibitions are essential to protect investors’ assets,” he said. said Gurbir Grewal, director of the SEC’s Enforcement Division, in the statement.

A Binance spokesperson said in a statement Saturday, “While we maintain that the SEC’s request for emergency assistance was completely unwarranted, we are pleased that the disagreement over this request has been resolved on mutually acceptable terms. User funds have been and always will be safe on all Binance-affiliated platforms.”

Also under the agreement, Binance.US will create new cryptocurrency wallets that employees of the global exchange will not have access to. The company will also provide additional information to the SEC.

Binance’s US subsidiary halted dollar deposits last week and gave its clients until June 13 to withdraw their dollar funds, after the SEC asked a court to freeze its assets.

(Reporting by Baranjot Kaur and Akanksha Khushi in Bangalore, additional reporting by Jose Joseph, Benjamin Mallet)

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