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 while it fights fraud charges from the SEC.
According to a consent order filed on Saturday, the defendants in the June 5 lawsuit have agreed to repatriate all withheld assets for the benefit of Binance's US trading clients.
The SEC alleges Binance violated US law by operating as an unregistered stock exchange. He brought similar charges against the world's other major cryptocurrency exchange, coin basealmost simultaneously.
But Binance and its CEO, Changpeng Zhao, face additional charges of siphoning client funds, hiding the fact that it was mixing billions of dollars in investor assets and sending them to a third party also owned by Zhao.
As a result, the SEC requested that the assets of Binance's US platform be frozen.
The order signed by Washington, DC federal judge Amy Berman Jackson prevents defendants from spending corporate assets other than 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 clients and transfer assets to them within two weeks.
The cryptocurrency industry has been affected by scandals and market crashes. Industry leaders say the SEC crackdown indicates that US regulators believe 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, further calling them " Wild West. โ
The collapse of cryptocurrency prices last year, as well as the demise of several notable cryptocurrency companies, including FTX, exposed investors to multi-billion dollar losses.
