SEC claims Binance.US ‘refuses to provide information’, asked the court to intervene
Binance's United States arm, Binance.US, is not responding to key questions related to customer assets and other key aspects of an ongoing investigation, according to the US Securities and Exchange Commission.
BAM Trading Services – operating as Binance.US – was “unable or unwilling” to respond to requests for information regarding the protection of customer assets, the SEC alleged in a joint position report filed on March 5 with the District Court in Washington, DC.
He asked the court to intervene to speed up the investigation process.
“The SEC believes that it is at issue with BAM regarding certain key questions that BAM has been unable or unwilling to answer, and the court's intervention is warranted,” SEC attorneys wrote.
“Among other things, BAM refused to comply with basic discovery obligations such as attaching responsive documents and producing metadata or providing a written response.”
At the heart of the SEC's investigation is whether employees of Binance's non-US arm had access to Binance.US client assets. The SEC was unable to confirm that Binance.US did not have other means of obtaining private keys or client assets.
In its report, Binance.US pushed back against the SEC's allegations that it had complied with all of the regulator's “extremely broad” information requests and asked the court to stop the accelerated discovery process.
The exchange added that the SEC's claims regarding client assets were “baseless” and “excessive” for the securities regulator.
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Binance.US has prepared thousands of documents about “all asset protection practices,” including sworn statements, monthly reports, and joint protection tools involving client assets.
The SEC indicted Binance, Binance.US and the exchange's founder and former CEO Changpeng “CZ” Zhao in June last year for selling unregistered securities and consolidating client assets at a company controlled by Zhao.
In the year On November 21, Binance reached a $4.3 billion settlement with the US Department of Justice, admitting to violating US money laundering and terrorist financing laws.
As part of the deal, Zhao pleaded guilty to money laundering and faces a felony sentencing hearing on April 3 where he could face up to 18 months in prison.
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