In response to Binance Holdings Limited's objection to the SEC's move for expedited discovery of customer assets, the SEC submitted a reply in support of the motion. The statement comes from Binance after months of purported delays and imprecise comments as it defends itself against claims that it broke federal securities laws.
In the ongoing crypto custody dispute, the SEC seeks a court-ordered investigation of Binance US.
The SEC claims in the 12-page filing that Binance has not complied properly with a consent decree requiring it to provide papers and other information about the custody and control of customer cryptocurrency holdings. According to the agency, subsequent depositions have shown that Binance likely suppressed key papers and information without a valid reason. In a court filing, the SEC claims:
Inconsistent statements about important facts, slow-moving tiny document and information productions, and stalling on whole categories of information have all been used by [Binance] to obscure its dubious claims on the custody of customer funds.
The SEC draws attention to allegedly contradictory claims made by Binance regarding the company or entities in charge of guarding customer assets. It also mentions that the company was first perplexed about how a company connected to Binance by the name of "Ceffu" controlled assets. This, according to the SEC, emphasizes the necessity of thorough discovery to protect assets during litigation.
The SEC's legal team argued that the court ought to "reject [Binance's] half-hearted claims of irrelevance, prejudice, and burden, and instead grant the Motion to Compel in its entirety."
Binance asserts that it has complied with its discovery responsibilities and that more inquiries would be burdensome. The SEC disputes this claim, saying it lacks detail and supporting data. According to the regulator, the scant information discovered so far shows Binance was in possession of important communications and other documents.
The SEC motion requests that Binance provide papers about its wallet custody policies, communications regarding its controlling assets, materials from former workers, and other information. The U.S. agency claims that this will reveal who is in charge of consumer assets and verify that the consent order is followed.
What do you think of the SEC's most recent court filing requesting the court's approval to look into Binance US? Post your ideas and viewpoints on this topic in the comments area below.