Binance has taken another legal action in its ongoing battle with the United States Securities Exchange Commission (SEC). On August 14, 2023, the exchange submitted a motion requesting a protective order against the regulator.
The motion, filed by BAM Trading, Binance’s U.S. operational entity, seeks to address what Binance perceives as SEC’s overreaching discovery demands and deposition requests.
Binance argued that the SEC’s actions so far have lacked “any discernible limitation whatsoever.” The exchange claimed that the SEC’s requests exceeded the boundaries of “limited expedited discovery” defined in the Consent Order granted to the regulator to request information from the exchange.
Binance noted that it has adhered to the Consent Order’s requirements and provided the necessary information on the custody, security, and availability of customer assets. But, in the last 45 days, the SEC has been “overboard” and made “unreasonable” demands that extend to comprehensive communications covering various topics unrelated to customer assets.
The motion also emphasized that the SEC’s pursuit of depositions from Binance’s senior executives, including the CEO and CFO, is unjustified as “their firsthand knowledge about the information in the Consent Order is limited.”
In response, Binance is seeking the court’s intervention to issue a protective order that reduces the number of depositions to four and excludes its CEO and CFO from the depositions.
The exchange also wants the court to issue the order to limit the subjects of deposition within the Consent Order’s scope and stop the requests for communications on unrelated matters.
Binance’s recent legal woes with the U.S. SEC began in June 2023 when the regulatory body filed 13 charges against the exchange and its top executives. The accusations include offering U.S. customers securities without registering as a securities exchange.
Subsequently, the SEC sought a temporary restraining order to freeze Binance’s assets until the exchange could demonstrate that its funds were inaccessible to Binance CEO Changpeng Zhao and other implicated executives. Binance opposed the motion, arguing that it would unjustly shut down the exchange.
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