The US Securities and Exchange Commission (SEC) is accusing Binance of withholding information during the discovery phase of the regulator’s lawsuit against the crypto exchange.
In a new lawsuit, the regulator says Binance is refusing to cooperate and providing only “extremely limited information” even though the court issued a consent order.
“More than two months later and despite repeated good faith efforts by the SEC to reach further compromise with BAM (Binance), the SEC essentially finds itself where it was when it first sought relief from the Court.
BAM continues to refuse, even in light of the Consent Order, to provide anything other than extremely limited information to ensure that the assets of BAM’s customers are not at the mercy of Defendants Binance Holdings Limited and [Binance CEO] Changpeng Zhao, two individuals who see themselves beyond the reach of the Court.”
The SEC says it wants to ensure that all crypto assets of Binance customers are accounted for and under their control. However, according to the regulatory body, Binance has so far provided limited or “incomprehensible” information and also refused to present key witnesses.
“Following the entry of the consent order, the SEC issued discovery requests seeking sufficient information to provide assurance that all customer and BAM assets are properly accounted for, within BAM’s exclusive control in the United States, available for withdrawal to fulfill customer obligations, and not subject to control by Binance entities.
BAM has produced only approximately 220 documents, many of which relate to reporting otherwise required under the Consent Order, and many that consist of incomprehensible screenshots and documents without dates or signatures. Furthermore, BAM refused to submit essential witnesses for the witness statement, but instead only agreed to four witness statements that it unilaterally deemed appropriate.”
The SEC initially sued Binance in June, alleging that the largest crypto exchange platform by volume was offering unregistered securities. At the time, the SEC alleged that Binance and Zhao profited billions of dollars while ignoring customer security protocols.
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