BAM Trading, the operator of Binance’s United States arm, recently filed a motion in the U.S. District Court of Columbia seeking a protective order against certain elements of the enforcement action initiated by the U.S. Securities and Exchange Commission (SEC). The crypto giant was specifically looking to limit the securities regulator’s request for information, deposition notices, and discovery requests.
According to the motion filed on August 14, 2023, BAM Trading claimed that it had provided the SEC with sufficient information in connection with the lawsuit filed in June 2023. In the initial complaint, the securities regulator accused the world’s largest crypto exchange of operating a “web of deception” by artificially inflating its trading volumes, diverting customer funds, misleading users about market surveillance controls, and failing to prevent American users from accessing the trading platform, among other things.
The filing claimed that the SEC already had the relief it wanted from Binance US, regarding the safety of customers’ assets. Describing the SEC’s discovery demands as an “inappropriate fishing expedition”, BAM Trading added that the regulator had failed to identify any evidence suggesting that customers’ assets were misused.
Speaking on previous attempts to limit information requests, BAM Trading stated:
“The SEC has declined BAM’s proposals or to meaningfully limit its requests. The SEC’s position is unreasonable and part of a broader pattern of the SEC abusing the discovery provision of the Consent Order.”
The Binance US operator claimed that the SEC’s extensive requests for information were overbroad and unduly burdensome. Through the latest motion, it sought to limit the securities regulator to four depositions from employees of BAM Trading and stop the deposition of the company’s Chief Executive Officer (CEO) and the Chief Financial Officer (CFO). At the time of writing, neither Binance nor the SEC had publicly addressed BAM Trading’s latest court filing. The crypto giant maintained that it held customers’ funds and exchange’s funds in segregated bank accounts.
