SEC Accuses Binance US of ‘Lack of Transparency’ in Discovery

Joshua Ramos
Source: Binance

The US Securities and Exchange Commission (SEC) has accused Binance US of a “lack of transparency” in the regulator’s discovery effort. Indeed, a new filing shows accusations from the agency of “numerous discovery failures” on the part of the cryptocurrency exchange. 

Additionally, the agency claims that they have only received 220 documents produced by the platform. Moreover, those documents included “unintelligible screenshots and documents without dates or signatures.” Alternatively, the filing comes as the exchange has seen several high-level executives depart the platform. 

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The SEC Calls Out Binance For “Discovery Failures.”

The SEC and Binance had been embroiled in a constant conflict regarding the latter’s compliance with regulatory standards. Now that a court case is underway between both parties, the agency is speaking out on the platform’s behavior. Specifically in the area of discovery.

Indeed, the SEC has accused Binanec of a “lack of transparency” in their failures during discovery. Subsequently, it states that Binance’s US holding company, BAM, has only successfully produced 220 documents, many of them including insufficient data.

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The SEC filed a lawsuit against Binance in June, with 13 charges issued against them. Now, the filing shows concern raised by the SEC regarding customer assets being controlled by a wallet custody service named Ceffu. That service is owned by Binance Holdings Ltd.

Interestingly, the ASEC argues that Ceffu maintains control of customer assets. Yet, the previous agreement notes that those assets were meant to be in the sole custody of BAM and remain in custody within the US. Additionally, the SEC states that BAM failed to provide enough evidence to illustrate that those assets are “at the mercy” of Binance holdings. 

Additionally, the SEC says Binance US responded to the communication’s demands with “blanket objections.” Moreover, they refused to produce certain pieces of evidence that they say do not exist. Yet, the SEC would uncover it from other sources. The filing arrives as the company loses its Chief Risk Officer and Head of Legal to resignation this week. Subsequently, those resignations preceded a long list of executive departures.