Binance Permitted to Continue U.S. Operations Amid SEC Fraud Charges

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In the midst of its legal battle against fraud charges filed by the U.S. Securities and Exchange Commission (SEC), Binance, the world’s largest cryptocurrency exchange, has reached a court agreement that allows it to sustain its operations within the United States.

According to a consent order submitted on Saturday, the defendants involved in the lawsuit from June 5 have agreed to repatriate all assets held on behalf of Binance’s U.S. trading customers.

The SEC alleges that Binance violated U.S. law by functioning as an unregistered securities exchange. Simultaneously, the agency brought similar charges against Coinbase, another prominent cryptocurrency exchange.

In addition to these allegations, Binance and its CEO, Changpeng Zhao, face further accusations of diverting customer funds. They are accused of concealing the fact that billions of dollars in investor assets were being intermingled and transferred to a third party owned by Zhao.

Consequently, the SEC requested the freezing of assets held on Binance’s U.S. platform.

As part of the court order issued by federal judge Amy Berman Jackson in Washington, D.C., the defendants are prohibited from utilizing corporate assets for purposes other than ordinary business expenses. The SEC statement also mentioned that the order mandates SEC oversight on all expenditures and prevents the defendants from destroying records.

According to the consent order, Binance is obliged to create new digital wallets specifically for U.S. customers and transfer their assets to these wallets within two weeks.

The cryptocurrency industry has been marred by scandals and market turmoil. Leaders in the field believe that the SEC’s crackdown indicates that U.S. regulators view cryptocurrencies as incompatible with the traditional financial system.

In August 2021, SEC chair Gary Gensler stated that investors were inadequately protected in cryptocurrency markets, likening them to the “Wild West.” Several prominent cryptocurrency platforms, including FTX, have exposed investors to substantial losses.

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• SEC Official Website
• Binance Official Website
• Coinbase Official Website
• SEC Chair Gary Gensler’s Remarks on Crypto Markets
• Cryptocurrency Industry News
• Cryptocurrency Market Analysis
• SEC Lawsuits and Enforcement Actions
• Cryptocurrency Regulations