SEC Demands Better Cooperation from Binance.US in Ongoing Lawsuit
Crypto Exchange Binance Refuses to Cooperate
The United States Securities and Exchange Commission (SEC) is increasing pressure on Binance.US, the American branch of the massive cryptocurrency exchange. The commission is demanding better cooperation in an ongoing lawsuit that started in June. The SEC is highly displeased with the crypto exchange’s lack of cooperation in the investigation. Binance has repeatedly refused to provide the necessary documents.
Background of the Lawsuit
In June, the regulator filed a lawsuit against Binance, Binance.US, and Binance CEO Changpeng “CZ” Zhao. The allegations stated that they had violated U.S. securities laws. Since then, the SEC has repeatedly requested that the American crypto exchange cooperates in providing access to internal documents.
SEC’s Request for Internal Documents
The SEC is particularly interested in obtaining information regarding the company’s operations, including who has control over customer funds at Binance. Initially, Binance.US agreed to cooperate, but later withdrew its cooperation, claiming that the regulator was making “unreasonable demands.” Earlier this month, the SEC accused Binance.US of a “lack of transparency” during the investigation.
The SEC now alleges that the exchange has completely failed to cooperate and has “withheld complete categories of information that would likely shed light on the custody of customer funds.”
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“The accelerated departure of BAM employees (BAM is Binance’s parent company), including the CEO and others who may have crucial information related to custody, control, and availability of assets, underscores the urgent need for expedited discovery on these issues.”
SEC’s Concerns about Customer Funds
According to the SEC document from Monday, referring to board members who left the company last week, the SEC claims that the U.S. branch of the company provided only “an extremely limited amount of information” about Binance’s custody platform, Ceffu. The SEC alleges that the company uses Ceffu to store assets on Binance.US.
However, Binance has always maintained that Binance.US, for U.S. customers, is a separate company and operates independently from its parent company.
The tensions between the SEC and Binance.US are escalating. The outcome of this case could have significant implications for the regulation of crypto assets in the United States and how regulators approach such matters in the future.
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