Irish Court Denies SEC’s Request for Inspection of Binance.US
In a recent legal battle between the US Securities and Exchange Commission (SEC) and Binance.US, an Irish court has denied the SEC’s request for an inspection of the exchange. The SEC had initiated legal action against Binance.US on June 5, 2023, alleging the sale of unregistered securities and raising concerns about the custody of customer assets. The regulator also sought to uncover potential connections between Binance’s American arm and its global affiliate, Binance Holdings Ltd, along with CEO Changpeng “CZ” Zhao.
During Monday’s hearing, Judge Zia Faruqui expressed reservations about allowing an inspection at this time. Instead, he suggested that the SEC should provide more specific requests for discovery and engage with a broader range of witnesses. This move aims to strike a balance between the SEC’s demands for transparency and Binance.US’s concerns about excessive information requests.
The SEC has accused Binance.US of noncooperation in the investigation, highlighting that Binance.US’s holding company, BAM Trading, had only produced 220 documents during the discovery process. Many of these documents were described as “unintelligible screenshots and documents without dates or signatures.” The regulator also noted that BAM Trading had been reluctant to provide essential witnesses for deposition.
On the other hand, Binance.US has argued that the SEC’s repeated requests for discovery are “unduly burdensome.” This ongoing dispute over cooperation has further complicated the already contentious legal battle between the two parties.
Today’s decision by Judge Faruqui comes amidst ongoing scrutiny of Binance.US. The exchange has faced intense scrutiny ever since the SEC initiated a lawsuit against it, resulting in a decline in trading volume and the departure of key executives.
In the court’s decision, the SEC’s request for an investigation into Binance.US was denied. The SEC claimed that Ceffu, a custody platform, was associated with Binance and was used to transfer funds of US customers out of the country, violating a prior agreement between Binance.US and the SEC. Binance.US argued that the SEC’s request was overly intrusive and burdensome.
While the court rejected the SEC’s request for an inspection, it required Binance.US to provide additional documentation. Judge Faruqui also expressed doubts about the exchange’s ability to maintain control over its assets.
This ruling is a significant development in the legal battle between Binance.US and the SEC. It remains to be seen how the case will progress and what impact it will have on the cryptocurrency industry as a whole.
Disclaimer: This article was written by an AI-powered software and reviewed by an editor. The information presented in this article should not be considered financial or legal advice. Please consult with a professional for any financial or legal concerns.