Cryptocurrency giant Binance has filed a motion for a protective order against the United States Securities and Exchange Commission (SEC), citing a “fishing expedition” from the regulator.
In an August 14 court filing, BAM Trading, the company behind Binance.US, filed the motion, seeking a protective order concerning deposition notices and discovery requests made by the SEC. The exchange noted the American regulator has urged Binance to hand over communications dating back to November 2022 for topics, many of which have nothing to do with customer assets, even after it had provided sufficient information to the regulator.
Binance is seeking a protective order against the SEC, claiming that they are conducting a "fishing expedition".https://t.co/NquMV8ShNK
— Molly White (@molly0xFFF) August 15, 2023
Binance’s Legal Troubles Escalate
The exchange explained that BAM has worked in good faith, but the SEC has been steadfast in its belief that the Consent Order gives it carte blanche to investigate every aspect of BAM’s asset custody practices without any discernible limitation whatsoever. It said,
“The SEC has declined BAM’s proposals or to meaningfully limit its requests. The SEC’s position is unreasonable and part of a broader pattern of the SEC abusing the discovery provision of the Consent Order,”
Furthermore, BAM also specified the SEC’s request that the exchange make six of its employees and officers available for depositions including its CEO Changpeng “CZ” Zhao, claiming it has already offered four witnesses for depositions, including “the two best positioned to address questions about the custody and security of customer assets.” BAM added,
“At the bottom, the SEC is conducting a fishing expedition instead of seeking the narrow and ‘limited’ discovery authorized by the Consent Order to ensure customer assets are presently secure and available.”
SEC Continues to Smother Binance
As per the recent filing, BAM asked the court to issue a protective order limiting the SEC to four depositions of its employees, preventing the regulator from questioning witnesses during depositions on matters outside the scope of the consent order and preventing depositions of BAM’s chief executive officer and chief financial officer.
It seems the Binance vs SEC fiasco is taking a turn for the worse as the world’s largest crypto exchange highlighted that the SEC is unnecessarily targeting BAM, maintaining the financial regulator has still yet to identify any evidence suggesting that customer assets were misused or dissipated in any way,
The heated debacle started after the SEC sued Binance and its founder Changpeng Zhao in June 2023, over alleged violations of the country’s securities laws, failing to restrict US customers from its platform and misleading investors about its market surveillance controls as well as for operating an unregistered securities exchange.
