Binance’s Auditor Raises Concerns Over Reserves Held by Binance Entities in the US
Binance, the world’s leading cryptocurrency exchange, is currently embroiled in a legal battle with the U.S. Securities and Exchange Commission (SEC). The controversy has brought to light some troubling findings by Binance’s external auditor regarding the reserves held by its entities in the US.
Adam Cochran, a prominent figure in the crypto community, has expressed his concerns about the situation, echoing the auditor’s findings. He questions how Binance can efficiently manage its vast international operations if it struggles with the supposedly smaller operations of Binance US.
Auditor Remarks Highlighted in Binance’s Legal Filing
In its recent legal filing, Binance objected to several SEC requests, including those related to its auditor filings. The report revealed that BAM Trading, which operates Binance US, relies on Binance.com custodian to provide information about asset addresses, making it difficult to ensure full collateralization at specific points in time.
SEC References Prior Auditor Finding
The SEC had previously referenced this finding in a document sent on May 22. According to the SEC, the auditor stated that Binance.US team lacks visibility into on-chain activity and relies on Binance.com for that information.
Undue Influence of Binance over Its US Subsidiary
The SEC suggests that these findings indicate the undue influence of Binance over its US subsidiary. In response, Binance claimed that the SEC’s request was overbroad and unduly burdensome and proposed a meeting to discuss it further.
Ongoing Legal Battle Sets Regulatory Precedent
The outcome of the legal battle between the SEC and Binance will establish a precedent for the regulation of cryptocurrency exchanges in the United States.
Hot Take: Binance’s Auditor Findings Raise Concerns About Reserves Held by Binance Entities in the US
The ongoing legal dispute between Binance and the SEC has shed light on concerning findings by Binance’s external auditor. The auditor’s remarks reveal issues with the reserves held by Binance entities in the US, raising questions about the exchange’s ability to manage its international operations effectively. The SEC suggests that these findings demonstrate Binance’s undue influence over its US subsidiary. This legal battle will have far-reaching implications for the regulation of cryptocurrency exchanges in the US, setting a precedent for future regulatory actions. It remains to be seen how this controversy will impact Binance and the wider crypto industry.
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