Binance, the leading cryptocurrency exchange, has approached the court for a protective injunction. This move directly responds to what Binance labels a “fishing expedition” by the Securities and Exchange Commission (SEC). Significantly, the SEC’s discovery requests and deposition summons, dated August 14, have raised eyebrows in the crypto community.
Binance emphasized its commitment to transparency, highlighting that “BAM has worked in good faith.” However, the SEC seems to hold a different view. The regulatory body believes the Consent Order grants them unrestricted access to a probe into BAM’s asset custody practices. Consequently, Binance expressed concerns over the SEC’s extensive investigative approach, which appears to lack clear boundaries.
SEC’s overreaching requests
Moreover, Binance shed light on the SEC’s demands to disclose conversations from as far back as November 2022. These conversations span “dozens of topics,” many of which, according to Binance, are unrelated to customer assets. Additionally, the exchange objected to the SEC’s insistence on deposing six top officials and employees. Among those named is Binance’s CEO, Changpeng Zhao (CZ).
Binance’s contention doesn’t end there. The exchange pointed out that the SEC’s demand to depose BAM’s senior executives is unwarranted. These executives, including CZ, need to gain unique firsthand knowledge about customer asset security, custody, and transfer. Besides, Binance has already offered employees the requisite knowledge for depositions. Hence, the exchange finds the SEC’s demands excessive and unnecessary.
As the crypto world watches closely, the tussle between Binance and the SEC underscores the challenges of regulatory oversight in the rapidly evolving digital currency landscape. Both parties hold strong convictions about their stances. However, the outcome of this legal battle will undoubtedly shape the future of crypto regulations and industry practices.
