Binance crypto exchange has filed a motion seeking a protective order against the US Securities and Exchange Commission (SEC), asserting that it has already provided ample information to the regulatory body.
Binance Accuses SEC of Unreasonable Demands
BAM Trading, the parent company of Binance.US, and BAM Management submitted a court motion on Monday accusing the SEC of unreasonable demands and misuse of its power.
The SEC’s pursuit of deposition notices and discovery requests, according to BAM Trading, has gone beyond the scope of what’s fair and necessary. This has prompted severe concerns about the SEC’s handling of the Consent Order, a process designed to assure regulatory compliance without inhibiting innovation.
BAM Trading’s Call for Reasonable Boundaries
In its motion, BAM Trading eloquently articulates its stance that the SEC’s actions, as characterized in the court filing, seem to be part of a broader pattern of abusing the discovery provision of the Consent Order.
In addition, the motion emphasized that Binance has offered not just one, but four witnesses for deposition, including key figures who can address the crucial issues of asset custody and security. Despite this show of cooperation, BAM Trading’s efforts have been met with resistance rather than reciprocation.
The protective order BAM Trading is seeking serves as a plea for judicial intervention to curtail the SEC’s seemingly unchecked power. If approved, the injunction would limit the SEC to only four depositions of BAM employees.
Furthermore, the protective order would act as a safeguard against the regulator’s attempts to venture into areas outside the scope of the Consent Order. Notably, BAM Trading’s CEO and CFO would also be shielded from potentially invasive depositions.
SEC’s Allegations and Binance’s Defense
In June, the SEC accused Binance and its CEO Changpeng ‘CZ’ Zhao of deceiving customers and channeling funds to a separate investment fund owned by Zhao.
In response, Binance vehemently denied the allegations, asserting that it maintains its customers’ fiat currency in segregated accounts, separate from corporate funds. The exchange also clarified that while Zhao does indeed own BAM Trading’s bank account, he lacks signatory authority over it.
The relief sought by the SEC, according to BAM’s filing, involves a confirmation that customer assets are securely maintained, covering any potential customer claims or liabilities. Despite the SEC’s expressed concerns, BAM pointed out that no tangible evidence has been presented to suggest any misappropriation or misuse of customer assets.