SEC Granted Permission to Reveal Documents in Legal Battle with Binance US
Last week, a district court judge granted the Securities and Exchange Commission (SEC) permission to disclose specific documents in their ongoing legal fight with Binance US. These documents had been concealed since August and were only available to the legal teams involved in the case. The SEC took action against Binance US in June, accusing the crypto exchange of operating without proper registration and raising concerns about customer funds being mixed with accounts controlled by Binance’s CEO. The SEC attempted to freeze Binance US’s assets, but an agreement was reached, imposing stricter transparency measures.
Criticism from the SEC
The SEC has criticized BAM, Binance US’s parent company, for providing insufficient documents for scrutiny. Many of the 220 documents submitted were difficult to understand screenshots and undated papers. The SEC also highlighted that Binance Holdings Ltd, the international entity of Binance, owns a wallet custody software service called Ceffu that appears to manage BAM’s crypto assets. BAM’s external auditor, FGMK, submitted over 6,500 documents related to how BAM handles its assets.
Magistrate Judge Makes Exhibits Public
U.S. Magistrate Judge Zia M. Faruqui ordered that certain exhibits be made public either in their entirety or with some confidential information redacted. Binance US and other parties involved have one week to justify why certain documents should remain classified. While the SEC has agreed to keep some information confidential, Binance previously filed a motion requesting the SEC to limit its inquiries. BAM accused the SEC of unreasonable conduct and claimed it was part of a broader scheme to misuse discovery provisions.
Hot Take: SEC Gains Access to Concealed Documents in Legal Battle with Binance US
Last week, a district court judge granted the SEC permission to reveal specific documents in their ongoing legal dispute with Binance US. These documents, which had been concealed since August, were made available only to the legal teams involved. The SEC accused Binance US of operating without proper registration and expressed concerns about the mingling of customer funds with accounts controlled by Binance’s CEO. Despite attempts to freeze Binance US’s assets, an agreement was reached that imposed stricter transparency measures. The SEC criticized BAM, Binance US’s parent company, for providing insufficient documents, while Binance argued that the SEC was misusing discovery provisions. Now, certain exhibits will be made public, pending justifications from the involved parties.
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