By Tom Blitzer
Key Insights:
- Judge Faruqui denies SEC’s immediate bid to probe Binance.US software.
- SEC’s transparency battle with Binance intensifies over unregistered securities claims.
- Binance labels SEC’s discovery demands as “unduly burdensome” amidst rising tensions.
In a recent twist, the United States Securities and Exchange Commission (SEC) met with resistance in pursuing Binance.US’s software. Judge Faruqui, at the helm of the case, declined the SEC’s immediate request. This pivotal decision surfaced during a September 18 hearing, where the SEC’s motion to compel Binance to release detailed information was examined.
Moreover, the SEC’s drive to make Binance’s executives more accessible for depositions has been contentious. The regulator’s endeavors to delve deeper into the crypto exchange’s workings have faced hurdles.
Consequently, Judge Faruqui advised the SEC to refine its discovery requests and recommended a broader engagement with witnesses, as detailed in a September 18 Bloomberg report.
SEC vs. Binance: A Transparency Tug-of-War
The SEC’s friction with Binance.US is not a recent episode. The tension traces back to June 5, when the SEC lodged a lawsuit against Binance.US, its global counterpart Binance Holdings Ltd, and CEO Changpeng “CZ” Zhao. The lawsuit’s crux is the crypto entity’s alleged sale of unregistered securities.
On September 15, the SEC voiced concerns over Binance.US’s perceived reluctance to cooperate. The regulator highlighted that BAM Trading, Binance.US’s parent company, had submitted only 220 documents during the discovery phase. Notably, the SEC remarked that many of these documents needed to be more straightforward, with a significant number being either undated or devoid of signatures.
Responses and Rebuttals
In the face of these claims, Binance has offered its counter-narrative. The crypto platform has termed the SEC’s persistent discovery requests “unduly burdensome.” While Binance did nod to a discovery order, the SEC contends that the exchange’s level of cooperation leaves much to be desired. At the heart of the SEC’s apprehensions is the custody of Binance.US customer assets. Therefore, the SEC advocates a thorough probe into Binance.US to identify potential ties to its global division.
In essence, the SEC’s journey to access Binance.US’s software has hit a temporary pause. Judge Faruqui’s directive underscores the importance of meticulousness in discovery requests. As this legal saga continues, both parties remain entrenched in their respective stances. The crypto community and broader audience will keenly track the following chapters in this evolving legal narrative.