August 29, 2023 at 09:47 GMTModified date: August 29, 2023 at 09:47 GMT
August 29, 2023 at 09:47 GMT

SEC files for documents under seal in new motion against Binance

The U.S. Securities and Exchange Commission (SEC) has taken its next step in the lawsuit against Binance, Binance.US, and Changpeng “CZ” Zhao

The U.S. Securities and Exchange Commission (SEC) has taken its next step in the lawsuit against Binance, Binance.US, and Changpeng “CZ” Zhao.

The regulatory watchdog has filed a sealed motion requesting permission to submit documents under seal.

According to a 28 August court filing, the motion was filed with the District Court of the District of Columbia. The move will allow the SEC to file sensitive or confidential information while keeping it away from the eyes of the public.

The contents of this recent submission is kept confidential, available only to authorised persons. The filing also included a collection of 37 supporting documents comprising exhibits, declarations, and supplements.

As per reports, it also includes a declaration of SEC senior trial attorney Jennifer Farer and an exhibit filed by SEC attorney Matthew Scarlato.

The recent development follows SEC’s June announcement of 13 charges directed at the world’s largest crypto exchange for the violation of U.S. securities laws. It accused trading behemoth and its CEO CZ for mishandling funds, misleading stakeholders, and enabling unregulated trading for U.S. investors.

Back then, the regulatory watchdog claimed that Binance had been commingling “billions of dollars” of customer funds and secretly sending them to an independent company controlled by CZ.

Recently, Binance.US had sought for a protective order. It argued that the SEC was exceeding the agreed-upon consent order and then requested the court for an order to preclude depositions of Binance.US’ CEO and CFO while rejecting the SEC’s demands that have nothing to do with the case. The exchange countered the SEC’s requests, deeming them excessive, asserting that the provided information was necessary for customer safety.

The issue has now been handed over to Magistrate Judge Faruqui, who will mediate the dispute between Binance.US and the SEC, as ordered by Judge Amy Berman Jackson.

Binance has been facing the hot seat in the U.S., tackling multiple lawsuits recently. In the month of March, the U.S. Commodities and Futures Trading Commission (CFTC) filed a lawsuit against the exchange, claiming that the company provided unregistered derivatives products in the country, such as cryptocurrency trading services, futures, and options products.

After Ripple’s partial victory in its lawsuit with the SEC and Coinbase’s motion to dismiss its lawsuit, Binance has been considering dismissing its own bag of lawsuits with the SEC and the CFTC.

In July, the exchange filed a motion claiming the CFTC doesn’t have the right to police its foreign entities because they’re not based in the U.S. It argued that the regulator exceeded its authority by attempting to govern foreign firms and individuals outside of the country.

Following its struggles with the ongoing regulatory headwinds and compliance in the U.S., Binance has also been considering abandoning Russia’s domestic market. It is now weighing options to leave Russia and has restricted trading pairs to only ruble.

Ever since Russia’s invasion of Ukraine last year which promoted a series of economic penalties on the former country, Binance has narrowed down its services to peer-to-peer trading services for Russians, where trading in all currencies except ruble was banned.

Binance has also sought compliance with the EU as it restricted Russian nationals and legal entities holding crypto in excess of 10,000 euros ($10,825) to withdrawal-only mode earlier this year.