The SEC Accuses Binance.US of Non-Compliance and Possible Breach of Consent Order
The Securities and Exchange Commission (SEC) has accused cryptocurrency exchange Binance.US (BAM) of failing to cooperate with its investigation and potentially violating a previous agreement to prevent the movement of assets overseas. According to the SEC, BAM has provided minimal information in connection with the probe, raising concerns about a breach of the consent order. The regulator stated that BAM has only produced around 220 documents, many of which are unintelligible screenshots without dates or signatures. Additionally, BAM has refused to provide key witnesses for deposition and has declined to ensure that US assets are accessed solely by its US arm.
Insufficient Cooperation and Violation of Consent Order
The SEC claims that Binance.US is not fully cooperating with its investigation into the exchange’s activities. The SEC alleges that BAM has failed to provide sufficient information requested by the regulator, potentially breaching a consent order. BAM has only submitted approximately 220 documents, many of which pertain to reporting required under the Consent Order. However, these documents often lack clarity and essential details such as dates or signatures. Moreover, BAM has objected to requests for relevant communications and refused to produce routine business documents. The SEC also criticizes BAM for not providing key witnesses for deposition.
Possible Violation of Agreement on US Assets Access
The SEC states that Binance.US may be violating an agreement requiring US assets to be exclusively accessed by its US division. This raises concerns about potential non-compliance with regulatory requirements and further complicates the ongoing legal battle between Binance and the SEC. The SEC accuses Binance.US of offering unregistered securities, leading to the lawsuit filed against the crypto exchange in June. As this legal drama unfolds, Binance is facing additional challenges with multiple high-level executive departures. Thirteen staff members have left the company since July, including the recent departures of the CEO, head of legal, and chief risk officer.
Executive Exodus and Staff Reduction at Binance.US
Binance.US is currently experiencing significant turmoil due to the legal battle with the SEC and a series of high-profile executive departures. Thirteen employees have left the company since July, including three departures in the past week and four in the previous week. The most recent executives to leave are the head of legal, Krishna Juvvadi, and the chief risk officer, Sidney Majalya. These departures follow the exit of Binance.US CEO Brian Shroder earlier this week. In response to these challenges, Binance has reduced its workforce by approximately one-third, resulting in around 100 job cuts.
Hot Take: Binance.US Faces Mounting Legal and Leadership Challenges
The SEC’s accusations against Binance.US for non-compliance with its investigation and potential violation of a consent order further escalate the legal battle between the crypto exchange and regulators. With limited cooperation from Binance.US and ongoing executive departures, the future looks uncertain for the company. The reduction in staff size adds to the mounting challenges faced by Binance.US. As regulatory scrutiny intensifies and leadership stability becomes a concern, Binance.US must navigate these obstacles to restore confidence in its operations and address regulatory concerns effectively.
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