U.S. Judge Denies SEC Immediate Access to Binance.US’s Software and Documentation
In the ongoing legal battle between the United States Securities and Exchange Commission (SEC) and Binance.US, a U.S. judge has denied the SEC’s immediate request for access to Binance.US’s software and other documentation. The hearing, which took place on September 18, discussed the SEC’s motion to compel Binance to provide detailed information and increase the availability of its executives for depositions, as reported by Bloomberg.
Judge’s Decision as Partial Setback for SEC
Judge Faruqui’s decision not to grant immediate access to Binance.US’s software is a partial setback for the SEC in its investigation of the cryptocurrency exchange. The SEC has expressed concerns about the custody of Binance.US customer assets and aims to uncover potential connections between Binance Holdings Ltd, its global affiliate, and CEO Changpeng “CZ” Zhao.
Judge Calls for Specific Requests from SEC
During the hearing, Judge Faruqui expressed reservations about allowing the inspection at this time. Instead, he suggested that the SEC should make more specific requests for discovery and engage with a broader range of witnesses. This approach aims to find a balance between the SEC’s transparency demands and Binance’s concerns about excessive information requests.
SEC Accuses Binance.US of Noncooperation
The SEC has accused Binance.US of noncooperation in the investigation, highlighting that BAM Trading, Binance.US’s holding company, had only provided 220 documents during the discovery process. Many of these documents were described as “unintelligible screenshots and documents without dates or signatures.” The regulator also noted BAM Trading’s reluctance to provide essential witnesses for deposition, agreeing to only four depositions deemed appropriate.
Ongoing Dispute Complicates Legal Battle
Binance has characterized the SEC’s repeated requests for discovery as “unduly burdensome,” adding complexity to the already contentious legal battle. The SEC has faced difficulties in obtaining information from Binance.US since initiating legal action against the exchange on June 5. The lawsuit alleges Binance.US’s involvement in the sale of unregistered securities.
Hot Take: Judge’s Decision Delays SEC’s Investigation into Binance.US
A U.S. judge’s decision not to grant immediate access to Binance.US’s software and documentation is a setback for the SEC in its ongoing legal battle with the cryptocurrency exchange. The judge suggested that the SEC should provide more specific requests for discovery and involve a wider range of witnesses, aiming to strike a balance between transparency demands and Binance’s concerns. The SEC accuses Binance.US of noncooperation, highlighting limited document production and reluctance to provide essential witnesses. This dispute complicates an already contentious legal battle, delaying the SEC’s investigation into Binance.US.
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