Judge Criticizes SEC’s Information Requests
The Securities and Exchange Commission (SEC) has criticized Binance, the world’s leading crypto exchange, for providing inadequate evidence in its ongoing battle with the regulator. The SEC claimed that Binance and its U.S. arm only submitted around 250 pages of evidence, including “unintelligible screenshots,” despite agreeing to provide more information. Additionally, the SEC alleged that Binance attempted to prevent its executives from testifying.
However, Magistrate Judge Zia Faruqui responded unfavorably to the SEC’s complaints. He accused the agency of embarking on a “fishing expedition” by making broad requests for information unrelated to the case.
Dispute over Internal Software Access
A significant point of contention between Judge Faruqui and the SEC concerns Binance’s internal software and that of its U.S. arm. The SEC argued that accessing this software could demonstrate a closer connection between both entities than they claim. It could even reveal that U.S. customer assets are held overseas, which is one of the main allegations against Binance by the agency.
In response, the SEC requested that Judge Faruqui allow an inspection of Binance’s internal workings and compel the exchange to provide other withheld information. However, the judge denied this request for now. Instead, he advised the SEC to make more specific information requests and conduct additional witness interviews.
Judge’s Decision and Response
“I am not inclined to allow the inspection at this time. At some point, we are going to have to bite the bullet and move on with the case.”
Matthew Martens, a lawyer from WilmerHale representing Binance.US, also commented on the request:
“We have responded to every targeted request by the SEC. What we are not going to respond to is the foolishness of document requests that came from the government here.”
The case will proceed based on the existing information, but there is a possibility of additional discovery if deemed necessary.
Hot Take: Judge Criticizes SEC’s Approach in Binance Case
In the ongoing legal battle between Binance and the SEC, a judge has criticized the regulator for its broad requests for information and lack of focus on the case at hand. The judge denied the SEC’s request to access Binance’s internal software, stating that more tailored requests and additional witness interviews should be pursued instead. This decision highlights the need for regulators to provide specific and relevant information requests to ensure a fair legal process. The case will continue with the evidence provided so far, but further discovery may be allowed if warranted. It remains to be seen how this dispute will unfold and what impact it will have on Binance and the broader crypto industry.
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