SEC Accuses Binance.US of Withholding Information, Seeks Court Intervention

Crypto News- Binance’s U.S. division, Binance.US, finds itself embroiled in a legal tussle with the U.S. Securities and Exchange Commission (SEC), as the regulatory body alleges a lack of cooperation in its ongoing investigation. According to a recent joint status report filed in a Washington, D.C. District Court, BAM Trading Services, operating as Binance.US, has been hesitant to provide crucial information concerning customer assets and other vital aspects of the inquiry.

The SEC contends that Binance.US has been “unable or unwilling” to address inquiries regarding the custody of customer assets, prompting the regulatory body to seek the court’s intervention to expedite the discovery process. In the report, the SEC’s legal representatives expressed frustration, stating that BAM has failed to fulfill basic discovery obligations, such as producing relevant attachments and metadata associated with requested documents.

SEC Accuses Binance.US of Withholding Information, Seeks Court Intervention

A central point of contention in the SEC’s investigation is whether employees of Binance’s non-U.S. entity retained access to Binance.US customer assets. The SEC asserts that Binance.US has not adequately demonstrated that it lacked access to private keys or other means of accessing customer assets.

In response, Binance.US refutes the SEC’s allegations, asserting that it has complied with the regulator’s comprehensive requests for information. The exchange argues that the SEC’s claims regarding customer assets are baseless and highlights its extensive efforts to cooperate with the securities watchdog. Binance.US emphasizes that it has provided thousands of documents, including sworn declarations, monthly reports, and facilitated multiple inspections of shared custody devices involving customer assets.

The legal saga between Binance and U.S. authorities began when the SEC sued Binance, Binance.US, and the exchange’s founder, Changpeng “CZ” Zhao, in June of the previous year. The lawsuit alleged the sale of unregistered securities and the commingling of customer assets in a separate firm controlled by Zhao. Binance later reached a $4.3 billion settlement with the U.S. Department of Justice in November, admitting to violating U.S. money laundering and terrorism financing laws. As part of the settlement, Zhao pleaded guilty to money laundering charges and awaits sentencing on April 3, potentially facing up to 18 months in prison.