The US Securities and Exchange Commission (SEC) has raised concerns about Binance.US’s lack of full compliance with the court order in their case. The SEC claims that Binance.US has been withholding crucial information about their customers’ assets and other key details. As a result, the SEC has requested the court’s involvement to ensure proper discovery in the case.
SEC Raises Concerns Over Binance.US’s Non-Compliance
In a recent status report filed on March 5 to a Washington, D.C. District Court, the SEC expressed frustration with Binance.US’s reluctance to provide essential information regarding users’ funds and other crucial aspects. The regulator pointed out that the exchange has failed to respond to requests for details about the custody of customers’ assets.
The SEC’s attorneys emphasized the impasse they have reached with Binance.US on critical questions that the exchange has not satisfactorily addressed. The SEC believes that court intervention is necessary to move forward with the case effectively.
Binance.US’s Response and Claims of Compliance
On the other hand, Binance.US argued that they have followed all necessary procedures in the case and investigation. The exchange stated that they have provided a multitude of documents related to their asset custody practices, including monthly reports and sworn declarations. They have also allowed inspections of shared custody devices linked to customers’ assets.
Regarding the SEC’s allegations about Binance Holdings’ ability to transfer users’ assets, Binance.US clarified that only their staff, not Binance Holdings employees, have control over customers’ assets. The exchange explained that in cases of transfer issues, their clearing officer may seek technical assistance from Binance Holdings personnel.
Legal Battle Unfolds Between SEC and Binance.US
The SEC filed a lawsuit against BAM Trading Services (operating as Binance.US), Binance Holdings, and some executives, including Changpeng Zhao, the founder of the crypto exchange. The SEC accused both Binance global and the US-based exchange of violating US securities laws and alleged that Binance employees were managing Binance.US customers’ funds. However, Binance and Binance.US denied the SEC’s allegations and sought the dismissal of the case.
In June 2023, under the direction of Judge Amy Berman Jackson, a consent order was issued in the case. The order instructed Binance.US to safeguard users’ assets and expedite discovery. Binance and Binance.US have been in a legal dispute with the SEC, with both parties presenting their arguments in court.