Home Altcoins News SEC’s Ongoing Battle with Binance.US: Unveiling the Truth Behind the Lawsuit

SEC’s Ongoing Battle with Binance.US: Unveiling the Truth Behind the Lawsuit

SEC lawsuit

In a recent twist in the ongoing legal tussle between the U.S. Securities and Exchange Commission (SEC) and Binance.US, the securities regulator has taken a significant step by filing exhibits that shed light on Binance.US’s alleged failure to cooperate with a previously agreed consent order. This move comes as Binance.US vehemently asserts that the SEC’s requests are “overbroad” and “unduly burdensome” within the confines of a protective order.

 

Unveiling the SEC’s Opposition to Binance.US

As reported by CoinGape Media, the SEC has made a bold move by filing a “motion to unseal,” unveiling the contents of certain confidential documents related to the lawsuit. Furthermore, both parties have reached an agreement to make certain documents public, particularly those related to the SEC’s motion to compel discovery requests.

According to several filings associated with the motion to compel, the SEC has expressed grave concerns regarding the apparent lack of cooperation from BAM Management and BAM Trading, the entities behind Binance.US. The bone of contention centers around the separation of wallets, systems, and teams between Binance and Binance.US.

The SEC contends that Ceffu, formerly known as Binance Custody, continues to function as the custodian for both Binance and Binance.US, which contradicts the previously agreed-upon consent order. Additionally, the SEC has requested depositions from CEO Brian Shroder and Jasmine Lee, a demand that Binance.US strongly opposes. Interestingly, the SEC has already obtained depositions from other Binance.US executives, including Erik Kellogg and Tao Zhang.

SEC’s Arsenal: 31 Exhibits to Support Its Motion

To fortify its stance, the SEC has submitted a staggering 31 exhibits to support its motion to compel and its opposition to Binance.US’s motion for a protective order. While only a glimpse of these exhibits has been revealed so far, these documents provide crucial insights into the SEC’s concerns.

Meanwhile, Magistrate Judge Faruqui issued a minute order, scheduling the next hearing for September 18. During this hearing, the court is expected to deliberate on the protective order and the motion to compel, potentially revealing more documents and obtaining depositions from key executives involved in this contentious legal battle.

In an unexpected turn of events, CEO Brian Shroder announced his resignation earlier this week amidst a series of layoffs at Binance.US. This sudden development has sent ripples of fear, uncertainty, and doubt (FUD) throughout the cryptocurrency industry, leaving many wondering about its potential implications.

The SEC vs. Binance.US: Unpacking the Legal Drama

To fully understand the significance of this legal showdown between the SEC and Binance.US, it is crucial to delve into the intricacies of the dispute.

The U.S. Securities and Exchange Commission, responsible for regulating securities markets and protecting investors, initiated legal action against Binance.US, an American subsidiary of the renowned global cryptocurrency exchange, Binance. The lawsuit revolves around alleged violations of the consent order issued previously.

At the heart of the matter is the supposed failure of Binance.US to adhere to the terms of the consent order, particularly with regard to the separation of assets, systems, and teams from its parent company, Binance. The SEC argues that Ceffu, previously known as Binance Custody, is still actively serving as the custodian for both Binance and Binance.US. This contravenes the established consent order, prompting the SEC to take legal action.

Binance.US’s Defense: Protective Order and Overbroad Requests

In response to the SEC’s actions, Binance.US has vehemently defended itself, claiming that the regulatory body’s requests are excessively broad and unreasonably burdensome. These claims have led Binance.US to seek protection through a protective order, intending to limit the extent to which sensitive information is disclosed during the lawsuit.

The protective order is a legal instrument designed to safeguard certain confidential and proprietary information from public exposure. Binance.US’s argument hinges on the belief that the SEC’s requests go beyond the boundaries of what is necessary for a fair and just resolution of the case. They assert that revealing certain information could potentially harm their business operations.

The Court’s Role: A Crucial Hearing Ahead

As the legal battle rages on, the courtroom is set to play a pivotal role in determining the outcome of this dispute. The next hearing, scheduled for September 18, is poised to be a watershed moment in this ongoing saga.

During this hearing, the court will deliberate on several critical matters, including the fate of the protective order and the SEC’s motion to compel. This decision has the potential to reveal additional documents, further deposition of key executives, and ultimately, shape the trajectory of the legal proceedings.

Brian Shroder’s Resignation: A Surprise Twist

Adding an unexpected twist to the unfolding drama is the recent resignation of Binance.US’s CEO, Brian Shroder. This departure comes in the wake of a series of layoffs within the organization, raising questions about the internal dynamics at Binance.US and the potential implications for the wider cryptocurrency industry.

Shroder’s resignation has generated significant speculation and concern within the crypto community. Many are left wondering whether it is a response to the mounting legal pressure or part of a broader strategic shift within the company.

Conclusion: Uncertainty Looms Over Binance.US

As the SEC’s lawsuit against Binance.US continues to unravel, uncertainty looms large over the future of the crypto exchange. The battle in the courtroom, combined with the unexpected departure of CEO Brian Shroder, has cast a shadow of doubt over the cryptocurrency industry.

The September 18 hearing will likely provide more clarity on the direction this legal dispute will take. Until then, the crypto community and the broader financial sector will closely watch the unfolding events, as they have the potential to significantly impact the regulatory landscape for digital assets in the United States.

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Julie J

Julie is a renowned crypto journalist with a passion for uncovering the latest trends in blockchain and cryptocurrency. With over a decade of experience, she has become a trusted voice in the industry, providing insightful analysis and in-depth reporting on groundbreaking developments. Julie's work has been featured in leading publications, solidifying her reputation as a leading expert in the field.

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