Key takeaways:
- SEC presses court to force Binance cooperation amid concerns.
- Ceffu’s ties to Binance questioned despite its independence claim.
In a strongly worded court filing made on a Monday, the U.S. Securities and Exchange Commission (SEC) has strongly urged a court in Washington, D.C. to grant permission for an examination of Binance.US.
This move represents a reinforcement of previous allegations by the SEC that Binance.US has failed to produce the documents requested by the regulator in the ongoing legal proceedings.
The latest development shouldn’t come as a surprise, as the SEC has escalated its legal dispute with Binance.US, citing the cryptocurrency exchange’s lack of cooperation on September 14th.
In the recent court filing, the SEC did not hold back in its criticism, particularly targeting Binance.US’s parent company, BAM, for only providing a meager 220 documents during the discovery process. Additionally, the SEC contended that many of these documents were filled with incomprehensible content and were missing crucial dates and signatures.
While the recent development concerning Binance’s U.S. branch appears to be a predictable problem, netizens are quick to turn such moments into humorous memes.
In June, the regulatory body filed a lawsuit against Binance.US, along with its global parent company, Binance Holdings, and founder Changpeng “CZ” Zhao. The lawsuit alleged that they were operating an unlicensed securities exchange.
In its latest court filing on Monday, the SEC emphasized the pressing need for an inspection, citing its ongoing concerns regarding Binance’s utilization of the custody platform Ceffu. This platform, previously known as Binance Custody and rebranded earlier this year, is believed by the SEC to be potentially serving Binance.US as well.
The SEC, in its legal pursuit, characterized Zhao as someone who sees himself as beyond the reach of any court’s jurisdiction. The regulator urged the court to dismiss Binance’s somewhat lukewarm assertions of irrelevance, prejudice, and burden and, instead, enforce the exchange’s obligation to furnish the depositions, communications, and other requested information.
On the other hand, Ceffu has maintained that it operates as a completely independent third-party technology service provider and is not formally affiliated with Binance. However, its connections to the cryptocurrency exchange remain somewhat ambiguous.
This suspicion centers around the concern that it might be used to move U.S. customer funds out of the country, which would violate a prior agreement not to do so.
Following the SEC’s lawsuit, Binance has encountered various obstacles, including 13 charges such as operating unregistered exchanges and issues related to its affiliate, Binance.US.
The SEC further raised issues about Binance.US’s responses to requests for relevant communications, noting that the exchange had issued blanket objections and claimed that crucial documents essential to their business operations did not exist.
Ironically, the SEC later managed to procure some of these supposedly non-existent documents from alternative sources, thereby raising significant doubts about the exchange’s transparency.
