US SEC Accuses Binance of Withholding Information
The US Securities and Exchange Commission (SEC) has filed a memorandum in support of its motion to compel Binance to provide certain information. This is part of the ongoing SEC lawsuit filed on June 5, 2023, which accuses Binance of violating securities laws and operating as an unregistered exchange, broker, and clearing agency in the US.
Binance Partner Refuses to Provide Information
The SEC has accused Binance Holdings and its co-founder Changpeng Zhao of refusing to provide requested information about the custody, security, and availability of US customer assets. The agency informed the court that Binance’s partner BAM Trading Services has provided only “extremely limited information” even after two months since the court’s consent.
The SEC is seeking information to determine if BAM’s customer assets are under Binance Zhao’s control. It also questions whether Binance has violated the court order by providing insufficient information. This could potentially lead to a new turn in the Binance SEC probe if the court investigates these accusations.
Limited Cooperation from BAM
The SEC stated that it has issued discovery requests for information to ensure proper accounting of all customer and BAM assets. However, BAM refused to produce essential witnesses for deposition and only agreed to four witness depositions. The SEC filing noted that BAM has provided around 220 documents, many of which are unintelligible screenshots without dates or signatures.
Interestingly, this SEC filing coincided with the resignations of Binance US Head of Legal and Chief Risk Officer, adding to a series of recent top-tier exits from the company.
Hot Take: What Lies Ahead for Binance?
The latest filing by the US SEC suggests that there is growing tension between the agency and Binance regarding the provision of information. If the court agrees to investigate the allegations made by the SEC, it could potentially have significant implications for Binance’s operations in the US. As the probe continues, Binance will need to address these concerns and cooperate fully with regulatory authorities to ensure compliance with securities laws. The resignation of key executives also raises questions about the company’s stability and ability to navigate through these legal challenges.
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