According to court documents, Binance and the US SEC have been at odds for some time now regarding the supply of evidence and the scheduling of witness testimony.
Court filings show that the US Securities and Exchange Commission and Binance are still at odds over the production of evidence and the deposition of witnesses in the regulator’s case against the cryptocurrency exchange.
In a joint status report submitted on January 25th, the SEC claims that “there are important aspects of discovery from BAM that are outstanding.” In the United States, Binance.US is run by BAM Trading Services.
Binance has been engaged in controversy due to the SEC’s lengthy demands for proof in the court action, which have raised concerns about custody and liquidity of funds. The authority has been investigating whether Binance.US, like FTX, had a backdoor that may have allowed it to control client assets.
According to BAM’s attorneys, the company has fulfilled all of its document production responsibilities as stated in the consent order and accelerated recovery request. They are requesting the court to recognize this.
“Considering the significant harm and burden that the SEC’s TRO and expedited discovery approach have inflicted on BAM over the past seven months, BAM believes it will have more than reasonably fulfilled its obligations under the Consent Order and requests that expedited discovery be considered complete as to BAM.”
Legally, the parties to the consent order agree on what the SEC may and may not investigate. BAM claims the SEC is going too far in its examination of BAM’s custody rules, methods, and practices, both present and past, and that the probe should only focus on verifying the safety and appropriate accounting of client funds.
Additionally, there are arguments on the scope, scheduling, location, and number of depositions between the attorneys representing BAM and the SEC, who are now debating the possibility of examining Binance co-founder Changpeng Zhao.
Following Binance’s November 2023 CEO resignation and the $4.3 billion settlement with US authorities, Zhao was had to step down from his post. On February 23, 2024, sentence will take place, and by February 15, 2024, the next case status report must be submitted. Zhao, who faces a maximum sentence of 18 months in jail, is presently free on a $175 million bail in the US.
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