Binance and U.S SEC continue to clash over evidence production and witness depositions in the regulator’s case against the crypto exchange.
Court documents indicate that Binance and the United States Securities and Exchange Commission continue to disagree regarding providing evidence and depositing witnesses in the regulator’s case against the cryptocurrency exchange.
In a joint status report dated January 25, the SEC maintains that “significant elements of the discovery process pertaining to BAM remain unresolved.” BAM Trading Services serves as the organizational progenitor of Binance. The US.
Extensive evidence requests made by the SEC to Binance in the court case have generated some contention, specifically concerning the custody and liquidity of assets. As with FTX, the regulator has been searching for indications that Binance.US may have had a conduit through which it could potentially control customer assets.
Legal representatives for BAM maintain that they have entirely adhered to the document production requirements outlined in the expedited recovery request and consent order. They implore the court to recognize that BAM has satisfactorily fulfilled its responsibilities.
“At that point, BAM believes it will have more than reasonably complied with its obligations under the Consent Order and requests that expedited discovery be deemed complete as to BAM, particularly given how much harm and burden the SEC’s TRO and approach to expedited discovery has caused BAM over the past seven months.”
A legal agreement known as the consent order delineates the scope of the SEC’s authorized investigations. BAM contends that the SEC’s inquiry should be confined to verifying customer asset security and accurate accounting.
The regulator is accused of surpassing this boundary by examining BAM’s custody policies, procedures, and practices, encompassing both the present and past.
An additional contentious aspect of the case pertains to the examination of the witnesses. The document enumerates explicitly pending requests for “BAM’s former CEO and CFO,” Brian Shroder and Jasmine Lee, respectively.
“BAM does not believe that the SEC is entitled to any additional depositions from current or former BAM personnel because, among other reasons, the SEC has already deposed a dozen witnesses during expedited discovery.”
In November 2023, Zhao tendered his resignation from the role of CEO of Binance by a settlement agreement worth $4.3 billion reached with regulators in the United States.
His sentencing is slated for February 23, 2024, and the subsequent case status report is due on February 15. Presently, Zhao is a free individual in the United States on a $175 million surety; he faces a maximum of 18 months in prison.
