Binance reaches agreement with the U.S. Securities and Exchange Commission, is it a settlement?

The proposed agreement resolves the SEC’s motion for a temporary restraining order but still requires judicial signature.

Binance, Binance.US, and the U.S. Securities and Exchange Commission (SEC) announced an agreement to ensure that only Binance.US employees have access to customer funds in the short term late Friday.

According to the proposed agreement signed by the federal judge who still needs to oversee the case, Binance.US will take steps to ensure that no Binance Holdings (referring to the global exchange) official can access the private keys of its various wallets, hardware wallets or root access to Binance.US's Amazon Web Services tools. In addition, the US-based cryptocurrency trading platform will share detailed information about its business expenses, including estimated costs, in the coming weeks.

The proposed transaction is in response to the SEC’s motion to freeze all of Binance.US’ assets while it pursues the exchange for securities-related charges. The regulator said it was concerned that funds could be moved overseas or records destroyed if a temporary restraining order (TRO) was not obtained. Binance.US’s lawyers countered that freezing all of its assets would be tantamount to a “death sentence.”

D.C. District Court Judge Amy Berman Jackson told both sides they would be better off reaching an agreement on the proposed regulations rather than having her issue a restraining order, noting that a TRO comes with a two-week limit for a more in-depth hearing. She said at a hearing earlier this week that two weeks was not enough time to prepare, given that both sides had already submitted more than 4,000 pages of exhibits.

Other terms in the proposed agreement would see Binance.US create new crypto wallets that are inaccessible to employees of the global exchange, provide additional information to the SEC and agree to an expedited discovery timeline.

During this time, U.S. customers will still be able to withdraw funds.

The proposed agreement, if accepted, would address some of the concerns raised by the SEC as a broader lawsuit it filed works its way through the judicial system. The SEC sued Binance and Binance.US last week, alleging offering and trading in unregistered securities but also alleging significant commingling of funds and bad behavior. The proposed agreement does not delve into the broader litigation.