Binance has asked the US District Court of Columbia for a protective order against the US Securities and Exchange Commission’s (SEC) “overbroad” and “unduly burdensome” information requests. The order includes a proposal to limit employee depositions to four and absolve the CEO and CFO from appearances.
According to the exchange, the SEC asked for information about topics that have “nothing to do with customer assets.” At press time, the SEC had refused to comply with earlier requests to limit the provision of information.
Binance Protective Order Claims CEO and CFO Have Little Knowledge
In its protective order, Binance said the SEC did not say how its requests for information from the US business BAM Trading relate to the safety of customer assets.
“The SEC’s request is not proportional to the needs of the case. The underlying claims, in this case, have nothing to do with BAM’s asset custody practices.”
Additionally, BAM criticized the dismissal of a proposal to limit the scope of data searches.
“BAM does not understand (and the SEC has not explained) why it also needs communications to assess the custody and security of customer assets, which leaves BAM guessing as to what subset of communications about customer assets would satisfy the SEC’s requests.”
Binance also argues its CFO and CEO should be exempt from testifying at depositions. The move raised critics’ eyebrows on social media, with some calling for “sleazy CZ” to be arrested, an allusion to Binance’s CEO Changpeng Zhao.
SEC and Binance Already Agreed on Handling Customer Assets
Earlier this year, the SEC sued Binance Holdings, Binance.US (registered as BAM Trading), and Zhao for allegedly commingling user funds and deceiving users. The agency also accused the exchange of operating as an unregistered broker-dealer and clearinghouse.
Shortly after, the SEC requested permission to freeze BAM’s US assets. Later, both parties agreed to repatriate customer funds to the United States.
Tired of the uncertainty around the Binance lawsuit? We list some alternatives here.
The US Commodity Futures Trading Commission (CFTC) also sued Binance for opening its over-the-counter trading desk to US market makers. The exchange also withdrew from several regions after failing to meet anti-money laundering requirements.
Earlier on Tuesday, the exchange confirmed the delisting of several trading pairs, SNM/BTC, SNM/BUSD, SRM/BUSD, and YFII/USDT. All delisted coins will be converted to stablecoins and deposited in user accounts.
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