The SEC lost its lawsuit against Binance.US, the cryptocurrency trading platform. U.S. Magistrate Judge Zia Faruqui denied the SEC’s request for quick access to Binance.US’s software.
Since June, the SEC has been pursuing a case against Binance.US, its international counterpart Binance Holdings Ltd., and CEO Changpeng Zhao.
Throughout this period, the regulator has encountered difficulties in acquiring essential information.
In its efforts, the SEC sought the approval of a federal magistrate judge to inspect the company’s technological infrastructure and compel the provision of the requested information.
Nonetheless, Judge Zia Faruqui has encouraged both sides to collaborate on their discovery requests and advised the SEC to refine its information demands.
Furthermore, the judge has granted permission for the SEC to interview specific shareholders to assess the security of Binance.US’s funds.
One of the pivotal concerns in the SEC’s argument revolves around the relationship between Binance.US and its service provider, Ceffu, and whether it complies with an order to segregate U.S. customer funds from the global entity.
Disagreements have arisen between the SEC and the company regarding the production of documents and deposition requests, with Binance.US contending that many of the SEC’s requests are excessively broad.
The SEC has revealed that the company has provided fewer than 250 documents and made available only three witnesses for deposition.
Judge Zia Faruqui’s ruling constitutes a temporary procedural setback for the SEC in one of its high-profile cryptocurrency cases.
A hearing has been scheduled for October 12, and both parties are expected to submit a joint status report by October 10, indicating that the legal dispute still needs to be resolved.
