News - Here's how the negotiations between Binance and the SEC are going

By Mike Hesp

Here's how the negotiations between Binance and the SEC are going

Laws and regulations
USA

The US legal dispute between Binance and the SEC is entering the next round. Here is the current status of negotiations.

Since the lawsuit by the Securities and Exchange Commission (SEC), the U.S. branch of Binance has been fighting to survive. The crypto exchange wants to avoid asset freezes at all costs. For now, the trading platform has been able to achieve partial success. Indeed, U.S. Judge Amy Berman Jackson has ordered that the two sides must reach an agreement. Also to avert "significant consequences" for the market. The disputing parties now have until June 15 to find a compromise.

From a court document of June 12 reveals that Binance filed a so-called "Consent Order" a day earlier. A kind of letter of intent in which the trading platform makes a number of concessions to the SEC. Among other things, BAM, the holding company behind Binance.US, wants to disclose its books to the securities regulator.

Binance.com refuses to disclose its balance sheet in full

In addition, Binance Holding Limited (BHL), which operates the main platform Binance.com, has agreed to share "certain information" about U.S. users with the agency. In addition, the SEC will have "limited insight" into the company's books, it said. However, the U.S. regulator is demanding verified disclosure of the balance sheet of both BHL and CEO Changpeng Zhao. Binance opposes the measure. The measure is "overly broad and inappropriate," writes the crypto exchange. The SEC lacked evidence that would justify such a move.

BHL wants to return key shards to BAM

Another issue concerns Binance's key shards. The contractual partners had the private keys of the wallets on which U.S. customers' balances are held, split up and divided between them. Binance Holding Limited now intends to hand over a total of five "fragments" to BAM as part of the Memorandum of Understanding. Three of these govern access to cold and hot Wallets. Two others provide access to stored customer balances. BAM also agreed that no customer funds will be stored on "physical devices outside the U.S."

In any case, it is a first step Binance is taking toward the SEC. The fact that the parent company only wants to give the authority a "limited insight" into its books could bring negotiations to a halt. It is hard to imagine that the SEC will waive this demand, also because the clock is ticking against Binance.

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