Inadequate Document Production
The Securities and Exchange Commission (SEC) has criticized Binance.US for its slow and insufficient production of documents. The regulator has called for a court-ordered inspection of the firm after BAM, the company behind Binance.US, failed to provide certain information regarding customer assets. The SEC accused BAM of attempting to sway the court with carefully crafted narratives and limited document sets, dismissing any concerns raised. These allegations were made just before a hearing at the U.S. District Court for the District of Columbia, following the SEC’s previous lawsuit against Binance.US and its founder for violating federal securities laws.
Request for Inspection
The SEC has demanded an inspection of BAM’s technological infrastructure, software, and other areas. The agency claims that BAM has withheld crucial information related to the custody of customer assets, which could undermine its assertions in this regard. According to the SEC, the limited inspection conducted thus far highlights the urgent need for a comprehensive inspection to shed light on these issues.
‘Mass Exodus’ of Executives
The SEC also commented on several high-profile departures from Binance.US, including CEO Brian Shroder. Krishna Juvvadi, head of legal, and Sidney Majalya, chief risk officer, also left last week. The agency emphasized that this “mass exodus” of employees who may possess critical information about asset custody further emphasizes the need for expedited discovery into these matters.
Hot Take: SEC Urges Court-Ordered Inspection of Binance.US Amid Allegations of Inadequate Document Production
The SEC has intensified its scrutiny of Binance.US by calling for a court-ordered inspection due to what it considers to be slow and insufficient document production by the company. This request comes as part of an ongoing lawsuit against Binance.US and its founder for violating federal securities laws. The SEC argues that BAM has failed to provide essential information regarding customer assets, attempting to sway the court with curated narratives and limited document sets. Additionally, the agency highlights the recent departure of key executives as further evidence of the need for urgent investigation into asset custody. The outcome of this court filing could have significant implications for Binance.US and the wider crypto industry.
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