The United States Securities and Exchange Commission (SEC) has raised concerns regarding Binance.US’s level of cooperation during the ongoing investigation into the activities of the digital currency trading platform.
The SEC Allegations Against Binance.US
According to a recent court filing, the SEC alleges that Binance.US, the American division of the global cryptocurrency exchange Binance, has been uncooperative in providing essential information and compliance with regulatory requests. This it claims is causing a shadow of doubt on the exchange’s commitment to transparency and adherence to regulatory guidelines.
Undoubtedly, the SEC’s investigation into Binance.US comes amidst growing scrutiny of cryptocurrency exchanges operating within the United States.
As per the court filing, the regulator mentioned that Binance.US’s holding company known as BAM only brought out 220 documents all through the discovery process. Additionally, almost all the documents produced consist of unintelligible screenshots and documents with no dates or signatures.
One of the key aspects of the SEC’s investigation is the demand for critical information related to Binance.US’s operations, financial records, and user data. This information is crucial for regulators to assess the exchange’s compliance with securities laws and investor safeguards.
However, BAM has refused to produce essential witnesses for deposition, instead, they produced just four depositions of witnesses which the exchange deemed appropriate. Meanwhile, the SEC was able to receive documents that BAM claimed were not available from other sources.
Binance’s Legal Troubles Escalate
Recall that last month, BAM Trading filed a motion seeking a protective order concerning deposition notices and discovery requests made by the SEC.
The exchange noted that the regulator urged its US outfit to hand over communications dating back to Nov. 2022, many of which have nothing to do with customer assets, even after it had provided sufficient information as mandated by law.
Notably, 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 limitations. Since the US SEC lawsuit in June 2023, the US offshoot of Binance has seen several key executive departures and other operational challenges.
Just recently, Brian Shrode, the CEO of Binance.US left his office due to the fact that the legal dual with the SEC has made life difficult for the company. Per the reports, the departure has made the exchange reduce its workforce by over 100 employees.
