On the heels of an intense legal tug-of-war, Binance pushes back against the US Securities and Exchange Commission (SEC). The crypto exchange giant alleges the regulator’s wide-reaching discovery demands impose unnecessary strains, criticizing the SEC’s focus on seemingly irrelevant issues.
Binance’s Petition for Protection
On August 14, Binance took a significant step in its ongoing battle with the SEC by filing a petition for a protective court order. The move underlines Binance’s contention that the SEC’s demands for exchange communications are unduly onerous.
‘Fishing Expedition’ Allegations
Binance’s core argument is that the SEC’s discovery actions mirror what is known in legal parlance as a “fishing expedition,” in which the regulator seeks broad data with hopes of stumbling upon actionable evidence. This approach, Binance argues, stretches beyond the primary focus of the case.
The company has been emphatic in its assertion that while it has made all requests for information in good faith, the SEC seems more inclined to pursue tangential issues. Notably, Binance pointed out that the SEC’s primary concerns don’t pertain to asset custody. Yet, their requests have included data on client assets, a move seen by many as overreach.
Critique of SEC’s Deposition Focus
Binance further underscores its commitment to transparency by citing its compliance with a June court order that delved into the security and management of customer funds. However, the exchange took issue with the SEC’s emphasis on depositions from top executives who aren’t directly involved in asset custody practices. Binance argues that it has already proposed depositions with relevant senior staff, an offer the SEC seems to have sidelined.
A Continuing Tussle
This skirmish is but a part of a broader confrontation between the SEC and Binance. Initially, the SEC alleged that Binance had been operating without proper securities registration. This claim mirrors another case the SEC has with Coinbase.
Despite an interim agreement permitting Binance’s operations in the US, the atmosphere remains charged as both sides stand their ground.
