(MENAFN- CoinXposure)
Binance, Binance.US, and the securities and exchange commission (SEC) reportedly disclosed an agreement late on Friday, June 16, limiting consumer access to funds temporarily to Binance.US employees only.
According to reports, the proposed agreement outlines measures for Binance.US to prevent Binance Holdings officials from gaining access to the private keys of wallets, hardware wallets, or root access to Binance.US's amazon web services tools , pending approval by the overseeing federal magistrate.
In the coming weeks, the U.S.-based crypto trading platform will also disclose extensive information on business expenses, including estimated costs.
The proposed agreement is a direct response to a petition filed by the SEC to freeze all of Binance.US's assets pending the outcome of ongoing legal proceedings involving securities-related charges.
The regulatory body expressed concern that if a temporary restraining order (TRO) was not granted, there could be a risk of funds being transferred offshore or vital records being deliberately obliterated.
However, Binance.US's legal representatives vehemently opposed this idea, arguing that freezing the company's assets would be tantamount to imposing an excessively severe“death penalty” on the company.
During a hearing earlier this week, the District Court for the District of Columbia's presiding judge, Amy Berman Jackson, advised the parties that it would be more advantageous for them to reach an agreement on a proposed stipulation than to rely on her to draft a restraining order.
The judge emphasized that a temporary restraining order has a limited duration of two weeks, which may be insufficient for a thorough hearing.
This is especially true in light of the numerous submitted exhibits, totaling over 4,000 pages.
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The proposed agreement includes provisions such as Binance.US's creation of new crypto wallets inaccessible to global exchange employees.
In addition, Binance.US agrees to provide the SEC with additional information and an accelerated discovery schedule. Notably, american consumers will be able to withdraw funds throughout this period.
If accepted, the proposed agreement will partially resolve the SEC's concerns pending the settlement of the more significant lawsuit.
The SEC recently filed a lawsuit against Binance and Binance.US for trading unregistered securities, commingling funds, and poor business practices. The proposed agreement does not, however, encompass the more significant case.