Binance, Binance.US and the US Securities and Exchange Commission (SEC) announced an agreement late Friday to ensure that only Binance.US employees can access client funds in the short term.
Under the proposed agreement, which must be signed by the federal judge overseeing the case, Binance.US will take steps to ensure that no Binance Holdings (referring to the global exchange) official has access to private keys for various wallets, hardware wallets or Binance.US's tools for rooting Amazon Web Services tools. .
Additionally, Binance.US will share detailed information on operating expenses, including estimated costs, in the coming weeks.
The proposed deal was in response to a request by Binance.US to freeze all its assets. The regulator has expressed concern that funds could be moved overseas or records destroyed if a temporary restraining order (TRO) is not issued. Lawyers for Binance.US responded by saying that freezing all assets would amount to a "death sentence."
Other provisions in the proposed deal will enable Binance.US to create new cryptocurrency wallets that are not accessible to global exchange employees, provide additional information to the SEC, and agree to an accelerated discovery program.
US-based customers will continue to be allowed to withdraw funds during this time.
The proposed deal, if adopted, would address some of the concerns the SEC has raised as its wide-ranging litigation moves through the judicial system. The SEC sued Binance and Binance.US last week on charges of offering and trading unregistered securities, also alleging that the funds were heavily mingled and there were bad practices.
The SEC also filed a lawsuit against company CEO Changpeng Zhao and sent a court order.
*Not investment advice.