SEC’s Motion to Unseal Documents in Binance US Lawsuit Approved by District Judge
A district judge has approved the Securities and Exchange Commission’s (SEC) motion to unseal documents in its lawsuit against Binance US. The information was previously filed under seal, but the SEC moved to make several documents public, including exhibits for a declaration made by SEC Trial Counsel Jennifer Farer. The approval comes after the SEC accused Binance US of a “lack of transparency” and the company saw executive departures.
SEC Lawsuit Against Binance US
The SEC sued Binance US in June, alleging that the exchange violated securities laws across 13 charges, such as operating as an unregistered securities exchange. In its complaint, the SEC also alleged that billions of dollars of customer funds were commingled in an account controlled by Binance CEO Changpeng Zhao. A deal was struck between Binance US and the SEC to prevent a freeze of assets in exchange for greater transparency and oversight.
Regulator’s Concerns
In its court filings, the SEC accused Binance US’s holding company, BAM, of only producing 220 documents related to the investigation, which fell short of ensuring the safety of customer assets. The SEC also argued that Ceffu, a wallet custody software service owned by Binance Holdings Ltd, appeared to have control over BAM’s crypto assets. The regulator raised concerns about BAM’s external auditor and claimed that it did not learn about the auditor’s concerns until July 2023.
Unsealing of Documents
U.S. Magistrate Judge Zia M. Faruqui instructed the court’s clerk to unseal over a dozen exhibits in full while redacting information from other exhibits partially or completely. The SEC did not oppose the sealing or partial sealing of some documents identified as confidential by Binance US, and parties involved have a week to provide explanations for why certain documents deserve the designation.
Hot Take: SEC’s Motion to Unseal Documents in Binance US Lawsuit Approved
The district judge’s approval of the SEC’s motion to unseal documents in its lawsuit against Binance US is a significant development in the ongoing legal battle between the two parties. The move allows for greater transparency and access to information related to the case, shedding light on the allegations made by the SEC against Binance US. As the lawsuit progresses, it remains to be seen how this unsealing of documents will impact the outcome and whether it will provide further evidence to support the SEC’s claims. Both Binance US and its parent company, Binance, are expected to closely monitor these developments as they defend themselves against the allegations.
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