A recent decision by a U.S. judge put the Securities and Exchange Commission (SEC) in a tough spot regarding Binance.US. During the court session on Monday, Sept. 18, the SEC’s request to examine Binance.US went unanswered.
Judge Advocates for Mutual Cooperation
Earlier in Q2 2023, the SEC accused Binance and its CEO, Changpeng Zhao (often referred to as CZ), of operating an unauthorized securities exchange. The commission’s primary concern has been to ensure the assets of the exchange’s U.S. patrons remain within the country.
Magistrate Judge Zia Faruqui, instead of making a decisive call, emphasized teamwork. He urged both entities to jointly address discovery demands, stating, “Let’s strive to resolve this collaboratively. I won’t dictate immediate actions. My priority is to maintain the momentum.”
The SEC Pushes for Clarity from Binance.US
The SEC has been pushing Binance.US to confirm the safety of its customer assets and has expressed a keen interest in understanding the platform’s ties with its service provider, Ceffu. Binance.US, in a recent report, critiqued the SEC’s inability to furnish proof of any misallocation of client funds. The crypto exchange even went on to describe the SEC’s motions as “excessively demanding” and “indiscriminate.” Lawyers representing Binance argued that the information demands of the SEC far outweighed any plausible benefits.
During the latest hearing, Judge Faruqui nudged Binance.US to shed light on its prevailing asset custody methods. Expressing his reservations, Faruqui remarked, “I’m unsure if BAM [Binance.US] truly oversees their assets. I believe we require a clearer picture.”
