Binance and the US Securities and Exchange Commission reached an agreement to avoid a full asset freeze of the platform in the US and keep customer assets in the United States, after a US district judge signed off on a consent order filed Saturday.
The agreement was reached amid a wide-ranging, ongoing lawsuit filed by the SEC, which could take months if not years to resolve, accusing the company of running an illegal securities exchange.
The defendants, which include CEO Changpeng Zhao, agreed to repatriate assets held for the benefit of US customers. The agreement makes sure those assets are protected and remain in the United States to prevent them from moving offshore, according to the consent order.
"Through 13 charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law," said SEC Chair Gary Gensler in a statement about the lawsuit in June.
Binance Holdings officials, including Zhao, also will not be able to have control over these assets, the agreement said. The assets and funds explicitly cannot be transferred to them, the agreement ordered, and will stay in domestic control.
The order also bans the defendants from spending the corporate assets on anything than "in the ordinary course of business," and they must give the regulatory agency oversight over the expenses, SEC said Saturday.
The SEC on Saturday said it secured the emergency relief to protect US customer assets.
"Given that Changpeng Zhao and Binance have control of the platforms' customers' assets and have been able to commingle customer assets or divert customer assets as they please, as we have alleged, these prohibitions are essential to protecting investor assets," said Gurbir S. Grewal, Director of the SEC's Division of Enforcement, adding the agreement ensures US customers can still withdraw their assets.
The commission is cracking down on the world's biggest crypto enterprises, filing a scathing complaint against Coinbase in early June as well. The industry has long been scrutinized for a lack of regulatory oversight.
The SEC asked a federal court to issue a temporary restraining order to freeze the US assets of Binance in early June, Reuters reported.
When reached for comment, Binance.US directed CNN to a Twitter thread on Sunday, which stated the company was looking forward to continuing defending itself in court.
"This fight has damaged our business and our reputation but not our fighting spirit or our resolve to defend ourselves against unwarranted charges and 'regulation by enforcement' tactics that do not belong in our system of justice," the tweet said, adding the earlier asset freeze request would have effectively shuttered its business.