Binance to repatriate US customer funds as legal woes mount
Binance has agreed to repatriate its US customers' assets pending a massive lawsuit against the world's largest crypto exchange, the US Securities and Exchange Commission said Saturday, adding that it will secure the funds.
Binance and its boss Changpeng Zhao have "agreed to repatriate to the United States assets held for the benefit of customers of the Binance.US crypto trading platform," the SEC said in its statement.
The regulator did not specify how many of Binance's US customers are affected, nor the value represented by these funds.
Earlier this month the SEC charged the crypto giant with securities law violations that it said amounted to "an extensive web of deception" and "calculated evasion of the law."
Binance is alleged to have permitted US residents to trade, even though the platform is not registered in the United States as a securities exchange. The case also alleges the firm misused customer funds.
The SEC says it wants to keep US customer funds safe, adding that the court order also prohibits Binance and Zhao "from spending corporate assets other than in the ordinary course of business."
"Given that 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 Grewal, director of the SEC's enforcement division, in the statement.
"Further, we ensured that US customers will be able to withdraw their assets from the platform while we work to resolve the alleged underlying misconduct and hold Zhao and the Binance entities accountable for their alleged securities law violations," he said.
A Binance spokesperson told AFP that user "funds have been and always will be safe and secure on all Binance-affiliated platforms."
"Although we maintain that the SEC's request for emergency relief was entirely unwarranted, we are pleased that the disagreement over this request was resolved on mutually acceptable terms," the spokesperson said via email.
The platform, created in Shanghai in 2017, has cornered much of the crypto-trading market, turning its globe-trotting founder Zhao into a billionaire.
But it has long been accused of facilitating money laundering, setting up complex structures to avoid regulation, and busting sanctions—claims it denies.
After the SEC announced the charges, Binance said earlier this month that it was halting US dollar deposits and encouraged clients to withdraw their dollars.
The case comes on the heels of charges in March against Binance by another US regulator, the Commodities Futures and Exchange Commission, and as the company faces a legal probe in France on allegations of illegal trading and money laundering.
© 2023 AFP