The SEC Urges Deeper Investigation into Binance’s Activities
Amid a series of resignations at Binance, including its US CEO, the SEC is ramping up its case by requesting a more extensive probe into the crypto giant’s operations. In a court filing, the SEC reiterated its accusations against CZ’s companies and asked for permission to conduct a thorough investigation into various aspects of Binance, such as asset custody. The SEC criticized Binance’s opposition to this motion, describing it as a half-hearted attempt to block access to vital company records and employee testimony.
Binance had previously opposed the SEC’s motion to compel, arguing that the provided counsel narratives and documents were sufficient. However, the SEC stated that the opposition highlighted the complexities it had been dealing with for months. The regulator also emphasized the need for depositions due to the recent wave of resignations, including CEO Brian Shroder.
SEC vs. Binance and CZ
In June 2023, the SEC filed a lawsuit against Binance.US, Binance Holdings, and CZ, accusing them of numerous rule violations such as commingling customer assets, securities fraud, and money laundering. Binance and CZ have denied these allegations and vowed to prove their innocence in a US court. The company has experienced significant employee turnover since then, with key executives resigning from their positions. This has raised concerns about employee stability at Binance. Additionally, trading volume on Binance.US has dropped significantly since its peak in March 2023.
Hot Take: SEC Ramps Up Pressure on Binance Amid Resignations
The recent wave of resignations at Binance has further intensified the ongoing battle between the crypto exchange and the SEC. As more key executives leave the company, including its CEO, the regulator is pushing for a deeper investigation into Binance’s activities. The SEC argues that these resignations highlight the urgent need for expedited discovery to uncover crucial information related to asset custody and control. Binance has previously opposed the SEC’s efforts, but the regulator maintains that the opposition only emphasizes the complexities it has been facing. With employee turnover concerns and a significant decline in trading volume, Binance’s future remains uncertain as it continues to fight against the SEC’s allegations.
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