The SEC Claims Binance.US is Not Cooperating with Investigation
The Securities and Exchange Commission (SEC) has accused Binance.US (BAM), the company behind the crypto exchange, of not cooperating with its investigation. The agency stated that BAM has only provided 220 documents so far, which falls significantly short of what is required. Additionally, the SEC requested specific information about customer assets, but BAM has not complied with this request.
In June, BAM agreed to provide discovery related to the custody, security, and availability of U.S. customer assets after the SEC sued Binance for violating federal securities laws. However, the agency claims that BAM’s document production has been inadequate, consisting of unintelligible screenshots and unsupported letters.
SEC’s Lawsuit Against Binance and CZ
The SEC filed a lawsuit against Binance and its founder Chanpeng ‘CZ’ Zhao in June, accusing them of misrepresenting the oversight of the Binance.US platform and other charges. Initially, BAM refused to provide information about Ceffu, a newly rebranded Binance entity believed to control customer assets. However, after negotiations with the SEC, BAM agreed to prioritize this discovery.
Next Steps for the SEC
The SEC is urging the court to compel BAM to comply with the consent order by providing information on Ceffu, communications regarding customer assets, and financial details. The agency argues that BAM’s refusal or failure to produce crucial documents such as general ledgers and bank account opening records hampers their ability to verify the safety and security of customer assets.
Binance previously filed a motion seeking a protective order against the SEC and claimed that it had already provided sufficient information. BAM criticized the SEC for rejecting their proposals and accused the agency of abusing the discovery provision of the consent order.
Hot Take: SEC’s Battle with Binance Intensifies
The SEC’s ongoing investigation into Binance.US has escalated as the agency accuses BAM of non-cooperation and inadequate document production. This latest development underscores the contentious relationship between Binance and the regulatory body. As the legal battle continues, the court will play a crucial role in determining whether BAM should comply with the consent order and provide further information. The outcome of this case will have significant implications for Binance and could potentially reshape the regulatory landscape for crypto exchanges in the United States.
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