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Binance.US, the U.S. offshoot of cryptocurrency exchange Binance, and the Securities and Exchange Commission (SEC) have agreed on a plan that would restrict access of customer funds from Binance.

The proposed deal, first reported by CoinDesk, is pending approval from a federal judge.

According to the proposed agreement, Binance.US will prevent any Binance Holdings officials from accessing private keys tied to client wallets as well as Binance.US’s cloud infrastructure. In the next few weeks, Binance.US expects to share information pertaining to the costs of these efforts. 

The proposed agreement comes in response to the SEC’s motion to freeze all of Binance.US’s assets following its lawsuit against the exchange, which alleges the exchanges were improperly connected and violated securities laws. The SEC expressed concerns that Binance.US funds could be moved offshore and requested a temporary restraining order. For its part, Binance.US’s lawyers argued that freezing its assets would be too harsh, comparing it to a “death penalty.”

U.S. District Judge Amy Berman Jackson recommended the two parties reach an agreement rather than imposing a temporary restraining order given the complexity of the case and the two-week limit for further hearings.

The proposed agreement will require Binance.US to create new wallets that are inaccessible to Binance’s global employees, provide additional information to the SEC, and agree to an expedited discovery schedule. During this time, U.S. customers will still be allowed to withdraw funds.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The crypto-community has raised over $500,000 to support anonymous crypto investigator ZachXBT, who announced yesterday he is being sued for defamation. 

The anonymous, on-chain lurker shared the lawsuit in a tweet Friday afternoon along with a digital wallet address for donations to help cover his legal costs, which he estimates could exceed $1 million.

The fundraising effort appears to have struck a chord with members of the crypto community, echoing concerns about censorship and legal threats against researchers. As of Saturday morning, ZachXBT’s donation address holds 163 ETH, worth about $290,000 at current prices, as well as ~$180,000 of USDC, ~$30,000 of USDT, and other coins. Notable crypto contributors include Adam Cochran and Alex Svanevik.

The lawsuit, filed in a Texas court, accuses ZachXBT of defaming Jeffrey Huang. ZachXBT alleged Huang embezzled cryptocurrency from Formosa Financial, a crypto startup. Huang demanded that ZachXBT remove the claims after denying them.

ZachXBT maintains that the lawsuit is baseless and meant to censor him. The case is poised to be an important test of free speech rights in crypto research and journalism. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Binance, Binance.US and the Securities and Exchange Commission (SEC) announced a deal to ensure that only Binance.US employees could access customer funds late Friday.

The Commodity Futures Trading Commission will decide on June 26 whether to start a formal 90-day review of prediction market provider KalshiEX’s contract that allows users to bet on which party takes control of the U.S. Congress.

MachiBigBrother has sued ZachXBT for an investigation the latter published in June 2022 alleging the trader stole tens of millions of dollars worth of crypto.

A self-described “on-chain sleuth” who goes by the pseudonym ZachXBT has been sued in a Texas court for defamation. 

The plaintiff is Jeffrey Huang, also known by his alias “Machi Big Brother,” and the suit claims that ZachXBT made defamatory remarks in a 2022 post that alleges Huang embezzled 22,000 ETH from the crypto management firm Formosa Financial. 

The lawsuit argues that the article lacked evidence and states that the “defendant’s
claims about plaintiff’s supposed criminal conduct are categorically false.” It says that ZachXBT sought to personally profit from the article by attracting clicks, encouraging retweets and “attracting additional ‘donations’ to fund his lifestyle, all at the expense of plaintiff’s reputation.”

The lawsuit says Huang was unsuccessful in his efforts to have the article taken down, and he’s now seeking a jury trial and compensatory damages.

ZachXBT responds to lawsuit

“The lawsuit is baseless and an attempt to chill free speech. I intend to fight back & defend free speech,” ZachXBT wrote on Twitter, adding that he had set up a donation address to “assist with legal costs associated with the defense of this matter, which could easily exceed $1m USD.”

He posted the wallet address to Twitter, and the balance is currently around 33 ETH, or about $57,000, according to Etherscan.

“All EVM Chains are accepted and stablecoins are preferred,” ZachXBT wrote, saying that any leftover funds would be returned to contributors on a pro rata basis. 

“This is a classic David & Goliath story,” he wrote. “My understanding is that Machi is very wealthy. I am not. He is using his money to try silence me. I’m asking for your help so this doesn’t happen & the truth survives.”

ZachXBT blacked out his name in a Friday tweet about the lawsuit, but his legal name is visible in copies of the lawsuit available in public databases. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Exchange Traded Fund (ETF) terminology can sometimes be tricky, and fund management giant BlackRock’s application for a spot Bitcoin ETF has raised some questions.

And it doesn’t really matter if it’s technically a trust.

Markets surged for a second time in the less than 24 hours following the fund management giant’s announcement that it had filed paperwork for the formation of a spot bitcoin ETF.

Stablecoin issuer Tether issued $11.6 billion of collateralized loans between June 2019 and May 2021, according to documents released this week by the New York Attorney General that relate to a legal settlement.

Out of the 694 loans, 89% of the total amount of loans was issued against bitcoin as collateral, while 9% had ether as collateral. The remaining 2% was split between Tether Gold (XAUT) and unnamed securities. Tether received a cumulative total of 450,000 BTC in collateral and 1.1 million ETH.

The documents also show that $8 billion of loans were repaid during that period.

“Tether has historically engaged in lending transactions – disclosed in our independent, third party assurance attestations – to a select group of larger Tether customers,” Tether said in a statement earlier today. It noted that the loans were overcollateralized.

Tether reduces loans

In December 2022, Tether said it was reducing secured and overcollateralized loans in its reserves to zero during the course of 2023. “Tether is professionally and conservatively managed and this will be demonstrated once again by successfully winding down the lending business without losses (since all loans are over-collateralized by liquid assets),” it said at the time.

The documents were gathered by the NYAG in its investigation into Tether, which resulted in a February 2021 settlement and an $18.5 million fine. They were released after a freedom of information request made by crypto publication CoinDesk, and the Attorney General’s office made them available to The Block. 

Tether did not immediately respond to a request for comment.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.