Home Latest Insights | News US SEC and Binance-US have Reached a ‘Settlement Deal’

US SEC and Binance-US have Reached a ‘Settlement Deal’

US SEC and Binance-US have Reached a ‘Settlement Deal’

The US Security and Exchange Commission – SEC and Binance.US have reached a settlement agreement that will end the lawsuit filed by the regulator against the crypto exchange and its founder Changpeng Zhao. The settlement, which was announced on June 16, 2023, will require Binance.US to pay a $200 million civil penalty and to implement various remedial measures to ensure compliance with the federal securities laws.

The lawsuit, which was filed on June 5, 2023, accused Binance.US and Zhao of operating unregistered securities exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities, including Binance’s own crypto assets. The SEC also alleged that Zhao and Binance secretly allowed U.S. customers to trade on the Binance.com platform, which was not registered with the SEC, and that they commingled and diverted customer assets to entities owned by Zhao.

The settlement agreement will resolve all the charges brought by the SEC against Binance.US and Zhao, without admitting or denying the allegations. As part of the settlement, Binance.US will cease offering certain crypto products and services to U.S. customers, such as BNB, BUSD, crypto-lending products, and staking-as-a-service programs. Binance.US will also register as a national securities exchange, broker-dealer, and clearing agency with the SEC, and will submit to regular audits and inspections by the regulator. Binance.US will also establish an independent board of directors and a compliance committee to oversee its operations and ensure adherence to the securities laws.

Tekedia Mini-MBA edition 15 (Sept 9 – Dec 7, 2024) has started registrations; register today for early bird discounts.

Tekedia AI in Business Masterclass opens registrations here.

Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.

Zhao, who is also known as CZ, will step down as the CEO of Binance.US and will divest his ownership stake in the company. He will also cooperate with the SEC in any ongoing or future investigations or enforcement actions related to Binance.com or other entities he controls. Zhao will also refrain from participating in any activities involving securities offerings or trading in the U.S.

Binance has struck a deal with the Securities and Exchange Commission that will allow it to continue operating in the U.S. and protect customer assets amid an ongoing lawsuit between the two over Binance’s alleged misuse of customer funds, The New York Times reports. The agreement, which needs approval from a federal judge, will only give U.S. employees access to customers’ private wallet keys and not any international officials, including founder Changpeng Zhao. The news comes a week after Binance.US told customers to withdraw their U.S. dollars after the SEC was pushing for an asset freeze. (LinkedIn News)

The SEC’s Chair Gary Gensler praised the settlement as a “significant achievement” for the protection of investors and the integrity of the crypto markets. He said that the SEC will continue to pursue enforcement actions against entities that violate the securities laws and put investors at risk. He also urged other crypto platforms to register with the SEC and comply with the regulatory framework.

Binance.US’s new CEO Brian Brooks said that the settlement marks a “new chapter” for the company and its customers. He said that Binance.US is committed to providing a safe and compliant platform for crypto trading and innovation in the U.S. He also thanked Zhao for his leadership and vision in creating Binance.US. The settlement agreement is subject to court approval.

The settlement deal is a major blow to Binance, which is the largest cryptocurrency exchange in the world by trading volume. Binance has been under intense scrutiny from regulators around the world, who have accused it of facilitating money laundering, tax evasion, and other illicit activities. Binance has also faced lawsuits from investors who claim they lost money due to Binance’s negligence or fraud.

However, the settlement deal is also not investor friendly. It leaves many questions unanswered about the legal status of Binance’s tokens and services, and the rights and remedies of its customers. For example, what will happen to the funds and assets of US customers who have accounts on Binance? Will they be able to withdraw them or transfer them to another platform?

How will they be compensated for any losses or damages caused by Binance’s actions or inactions?

No posts to display

Post Comment

Please enter your comment!
Please enter your name here