Intensifying Legal Battle Over Discovery
The ongoing legal battle between Binance and the SEC has reached a new level as recent court documents reveal. The dispute revolves around the production of evidence and witness depositions, with both parties having differing views on the investigation’s scope and nature.
Binance Accused of Non-compliance
The SEC has been actively seeking evidence from Binance in a case that questions the crypto exchange’s handling of customer assets. According to a joint status report filed on January 25, the SEC alleges that Binance.US has not fully complied with their requests for information. The SEC is particularly interested in understanding Binance.US’s custody and liquidity practices to ensure there are no undisclosed control mechanisms over customer funds.
Binance’s attorneys argue that they have fulfilled all document production requirements as per the consent order and expedited recovery request. They claim that the SEC’s Temporary Restraining Order (TRO) and methods of expedited discovery have unfairly burdened Binance.
Dispute Over Witness Examination Requests
Another major point of contention is the examination of key witnesses. The report mentions pending requests for depositions from former BAM CEO and CFO, Brian Shroder and Jasmine Lee respectively. However, Binance argues that additional depositions from current or former personnel are unnecessary since the SEC has already deposed numerous witnesses during the expedited discovery phase.
The examination of Binance co-founder Changpeng Zhao is also a subject of disagreement. There are ongoing disputes regarding the scope, timing, and location of Zhao’s deposition. Currently on a $175 million bond in the US, Zhao stepped down as Binance CEO in November 2023 after reaching a $4.3 billion settlement with US regulators. His sentencing is scheduled for February 23, 2024, further complicating the case.
Hot Take: Binance’s Legal Battle with the SEC
The legal battle between Binance and the SEC continues to escalate, with both parties holding firm on their positions. The SEC accuses Binance of non-compliance and seeks evidence related to the exchange’s handling of customer assets. Binance, on the other hand, argues that it has fulfilled all requirements and that the SEC’s approach has been burdensome.
Additionally, there are disputes over witness examinations, including requests for depositions from key personnel. The examination of Binance co-founder Changpeng Zhao adds further complexity to the case. As the legal confrontation intensifies, the outcome remains uncertain, but its implications for the crypto industry are significant.
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