Binance Escalates Against SEC

Cryptocurrency exchange Binance has thrown its hat into the ring, filing a protective court order against the U.S. Securities and Exchange Commission (SEC), according to a recent report from Reuters. Binance is calling foul on what it deems as "over broad" and "unduly burdensome" requests for information from the regulatory giant.

As BAM Trading,  Binance U.S.'s operating company, and BAM Management, points out, the SEC is gathering a lot of information without knowing its purpose rather than focusing on the limited inquiries allowed by the Consent Order, which are intended to ensure customer assets are secure.

By applying for the protective order, BAM Trading hopes to limit its depositions to four employees of BAM and omit the chief executive and chief financial officer's depositions. BAM Trading stated in a court filing that they had already provided enough information to the regulator. 

Last June, the SEC made an allegation against Binance, claiming it sent approximately $20 billion in commingled funds to a foreign affiliate of stablecoin issuer Paxos in 2021 via Merit Peak trading firm. 

The statement disclosed that Binance, along with its CEO Changpeng Zhao, held multiple accounts at the now-bankrupt Silvergate Bank and Signature Bank, which were used for transactions involving Zhao's companies. 

However, the filing said: 

"...the SEC has still yet to identify any evidence suggesting that customer assets were misused or dissipated in any way,"

According to the filing, the SEC rejected BAM's request for meaningful limits on its requests and opposed the motion for a protective order.