SEC Seeks Court Intervention as Binance.US Withholds Key Information Amid Ongoing Investigation
Summary:
The U.S. Securities and Exchange Commission (SEC) claims Binance.US has failed to provide key information about customer assets, forming part of an ongoing investigation into its operations. Claiming that Binance.US deflected from basic discovery duties, the SEC has asked for court intervention. Central to its investigation is whether non-US Binance employees had access to Binance.US customer assets. Binance.US refutes these allegations and asserts it complied with the SEC’s broad information requests.
The U.S. Securities and Exchange Commission (SEC) has reported that Binance.US, the American segment of global cryptocurrency exchange Binance, has been either unwilling or incapable of responding to essential inquiries relating to customer assets. This comes as part of an ongoing investigation into Binance.US’s operations. According to the SEC, Binance.US, known officially as BAM Trading Services, has been elusive in providing important information. The commission has subsequently requested a judicial intervention to hasten the discovery process.
The SEC argues that Binance.US has not furnished adequate details needed for the ongoing regulatory scrutiny. Among their accusations is the claim that Binance.US avoided engaging in basic discovery duties, including the production of requisite attachments and metadata associated with relevant documents. Additionally, they refused to provide written responses to the commission's inquiries.
A major focus of the SEC’s investigation is to determine if non-U.S. Binance employees had access to assets belonging to Binance.US customers. The agency says that Binance.US has failed to demonstrate conclusively that it did not possess private keys or any other modes of customer asset access.
In response, Binance.US refuted the SEC's allegations, insisting that it had fully complied with all the regulator’s extensive information requests. The exchange implored the court to conclude the expedited discovery process. Binance.US dismissed the SEC’s allegations regarding customer assets as “baseless,” claiming that it had exceeded its duties to the securities authority.
Concurrently, Binance.US confirmed that it had presented thousands of documents encompassing all facets of its asset custody practices. These include sworn declarations, regular reports, and multiple examinations of shared custody devices related to customer assets. The SEC launched a lawsuit against Binance, Binance.US, and the platform’s founder and ex-CEO, Changpeng “CZ” Zhao in June of last year. The allegations included selling unregistered securities and mixing customer assets with another firm under Zhao’s control.
In November, Binance agreed to a $4.3 billion settlement with the U.S. Department of Justice for U.S. money laundering and terrorism financing transgressions. Zhao entered a guilty plea to money laundering charges as part of the settlement and is now awaiting a criminal sentencing hearing on April 3. He faces a potential 18 month prison term.
Published At
3/6/2024 4:22:13 AM
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