In a major development in the U.S. Securities and Exchange Commission (SEC) probe on the operations of Binance, the agency has filed a memorandum in support of its motion to compel the exchange to do certain actions. The fresh filing is part of the ongoing SEC lawsuit, which was filed on June 5, 2023 over violating securities laws and operating as an unregistered exchange, broker, and clearing agency in the United States.
US SEC Says Binance Refusing To Provide Info
The US SEC had accused Binance Holdings as well as Binance cofounder Changpeng Zhao among other entities of refusing to provide any information sought about the custody, security, and the availability of US customer assets. The agency officials informed the court that over two months after the Court gave consent, the Binance partner BAM Trading Services refused to provide “Anything beyond extremely limited information.”
The SEC is seeking information to assess whether BAM’s customer assets are not being controlled by Binance Zhao, it said in the filing dated September 14, 2023. In addition, the agency wondered if Binance had violated the Court order with the little information it provided so far. Hence, will the Binance SEC probe take a new turn if the Court agrees to look into these accusations?
Limited Help Offered
The SEC said it has issued discovery requests focused on information sufficient to provide assurances that all customer and BAM assets are properly accounted for. It added that BAM refused to produce essential witnesses for deposition while agreeing only to four depositions of witnesses. However, the filing stated:
“BAM has produced only approximately 220 documents, many of which relate to reporting otherwise required under the Consent Order, and many that consist of unintelligible screenshots and documents without dates or signatures.”
Interestingly, the SEC filing was issued just around the time when the Binance US Head of Legal, and the Chief Risk Officer resigned from the company, continuing a string of top tier exits in the recent weeks.
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