SEC faces setback as judge denies document request in Binance.US case. The ruling calls for collaboration between the regulator and the crypto exchange.
SEC’s Quest for Immediate Access Denied
Amid the heated legal battle between the United States Securities and Exchange Commission (SEC) and Binance.US, a recent development has delivered a temporary setback to the SEC’s quest for immediate access to Binance.US’s software and essential documentation.
The legal saga between the SEC and Binance.US reached a pivotal moment during a hearing on September 18. The SEC had sought an immediate order to compel Binance to provide extensive information and facilitate the deposition of its executives. However, Judge Faruqui declined to grant the SEC’s request for immediate access to Binance.US’s software, marking a partial setback for the regulatory body in pursuing a comprehensive investigation into the cryptocurrency exchange.
Judge Calls for Specific Requests and Broader Engagement
Judge Faruqui’s decision not to allow immediate inspection of Binance.US’s software came with a call for a more targeted approach. Instead of a blanket order, the judge suggested that the SEC present more specific discovery requests and engage with a broader range of witnesses. This approach balances the SEC’s demands for transparency and Binance’s concerns about the burden of excessive information requests.
SEC’s Struggle for Cooperation
The SEC has repeatedly voiced its difficulties in obtaining essential information from Binance.US since it initiated legal action against the exchange. The core concern revolves around the custody of Binance.US customer assets and a desire to uncover potential connections between the American arm of Binance and its global affiliate, Binance Holdings Ltd, along with CEO Changpeng “CZ” Zhao.
The SEC has accused Binance.US of noncooperation during the investigation, highlighting that Binance.US’s holding company, BAM Trading, had produced only 220 documents during the discovery process.
These documents were described as “unintelligible screenshots and documents without dates or signatures.” Furthermore, BAM Trading had shown reluctance in providing essential witnesses for deposition, agreeing to only four depositions of witnesses deemed appropriate.
Final Thoughts
The ongoing dispute over cooperation between the SEC and Binance.US adds a layer of complexity to an already contentious legal battle. While the SEC seeks to unveil alleged misconduct in the cryptocurrency exchange’s operations, Binance insists that the SEC’s requests are “unduly burdensome.”
Judge Faruqui’s recent decision indicates that this legal confrontation is far from over, leaving stakeholders on both sides closely monitoring the developments in this high-stakes battle.