SEC Asks Binance to Cooperate in Document Discovery

Binance.US is in a legal tussle with Securities and Exchange Commission. The agency has asked the firm for providing documents and records regarding its funds management. However, Binance.US officials have rejected the request while maintaining that such a document does not exist.

At the same time, SEC officials have revealed that they have managed to receive some of the required documents listed in discovery process from other sources. The regulators have raised alarm that Binance failed to produce the required documents despite agreeing to cooperate with the discovery process.

BAM that is a head enterprise that currently oversee all operations for Binance.US sent 220 documents to SEC. However, most of these documents consist of unclear screenshots and documents that are sans the relevant date or authorized signatures. The prosecution has revealed these findings to the court recently.

At the same time, Binance.US is not carrying out deposition request from SEC with limiting the witnesses to 4 employees. SEC officials have therefore urged the firm to cooperate with the regulators to expedite the legal process.

SEC officials have retained in a recent court filing that Binance.US officials have failed to comply with the process of discovery. The agency has raised concerns about BAM raising objections to comply with the communication requests.

At the same time, the agency also objected that Binance.US has refused to produce the documents regarding daily business activities by giving an excuse that such documents do not exist at all. Therefore, SEC officials revealed that they have managed to gain access to these documents through other sources.

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Binance.US has filed for a protective order to block SEC from gaining access to four named executives at BAM. The motions will bar SEC from communicating with the BAM workers. The exchange has argued that there are many topics that the regulatory agency is seeking that are unrelated to their ongoing case.

Earlier this week, SEC and Binance.US filed for a joint protective order to retain the confidential information and protect private communications. Therefore, the entities have retained that any data that is not accessible to the public should be treated as protected material.

The data if ordered by the court should only be accessible to the judge, legal counsel, plaintiffs, court-approved committee, and defendants alone.

SEC Raises Alarm Regarding Binance.US Affiliate Ceffu

SEC officials have also brought to light a suspicious affiliate of Binance.US namely Ceffu. It is a custodial services provider that prosecutors reckon for breaching the service agreement that prevents it from distribution of funds overseas.

The prosecution has also alleged that they have spotted various inconsistencies in BAM’s statements about Ceffu and Binance’s management of consumer reserves and wallet accounts. The agency has alleged that BAM has granted custodial rights to Binance and control over consumer fund that are violation of the Consent Order.

At present, Binance is facing 13 counts of violations against on various accounts. Some of these charges allege the firm for dealing in unregistered securities and participating in other illegal activities. Kaiko data has revealed that Binance.US market share has dropped dramatically since the start of the lawsuit. At the same time, many of executives of the firm including CEO Brain Shorder have left the company.

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