Binance Holdings Limited, the global company behind the prominent cryptocurrency platform, has requested a protective order against the United States Securities and Exchange Commission (SEC), accusing the regulator of launching an unreasonable and unbounded investigation into Binance’s asset custody practices.
The clash between the exchange giant and the controversial watchdog has escalated amid the ongoing struggle for clear and balanced crypto regulations.
According to Binance’s petition on August 14, the SEC’s “fishing expedition” is irrelevant to the allegations in the original complaint, with the exchange having already provided information about customer assets.
Binance Strikes Back!
Upon the Consent Order on June 17, BAM Trading Services, the crypto-asset entity that allegedly operates Binance US, was required to take numerous actions, including permitting the SEC to conduct “limited expedited discovery” for a period of 90 days on a narrow set of topics—namely, the possession, custody, and control of BAM customer assets, including whether BAM can meet customer claims and liabilities.
However, Binance argued that although the company provided substantial information to the SEC concerning customer assets, the SEC has overstepped its bounds in its request for information from Binance.
“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,” the filing wrote.
Binance highlighted the SEC’s demand for all communications that Binance has had since November 2022, regardless of the topic. This is a very broad request, and it could be seen as an attempt to overwhelm Binance with paperwork and distract it from the main issue.
The exchange also criticized the SEC for requesting depositions from key Binance personnel. The SEC requests depositions from Binance CEO Changpeng Zhao and other key personnel. This could be seen as an attempt to exploit strategic weaknesses in Binance’s defenses and to gather information that the SEC could not otherwise obtain.
Binance’s move marks a significant turning point in the ongoing legal battle between Binance and the SEC.
Charges Are Piling Up
The exchange and its CEO, Changpeng Zhao, have faced 13 charges by the US SEC over their alleged wrongdoing. The dispute was taken to the federal court in Washington, US. Shortly after the lawsuit, the SEC requested a court order to freeze Binance’s assets. However, a US federal court judge rejected it.
During the hearing in June, the SEC failed to provide satisfactory answers and evidence, leading Judge Amy Berman Jackson to dismiss the SEC’s request. As a result, Binance.US retains its ability to operate within the US.
Judge Amy Berman Jackson underscored the significant repercussions that closing Binance.US would have not only on the exchange but also on the broader digital asset market, as reported by Bloomberg.
This court ruling presents an opportunity for a potential resolution between the SEC and Binance. Attorney Jennifer Farer, representing the SEC, indicated a willingness to allow Binance.US to continue its operations. Similarly, a representative from Binance affirmed their commitment to regular operation and their intention to maintain ties.
Another policing authority, the US Commodity Futures Trading Commission (CFTC), previously accused Binance and its CEO of regularly violating its regulations. CZ and Binance’s former compliance chief Samuel Lim of violating eight core provisions of the US Commodity Exchange Act, including the law requiring measures to prevent and detect money laundering and terrorist financing.
Binance coin (BNB) is trading at $238, a slight decline in 24 hours, according to CoinMarketCap. The crypto market has moved sideways over the past few weeks, with Bitcoin and Ethereum hovering around $29,300 and $1,800, respectively.
If the recent cases against other exchanges are any guide, it is likely that Binance will have to pay the SEC fines, but the company will continue to operate.
The post Binance Holdings Files Court Order Against The U.S. SEC appeared first on Blockonomi.
August 17, 2023 at 05:29AM https://blockonomi.com from Blockonomi https://ift.tt/ctpPVR6
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