• 29 May, 2024

SEC Files Sealed Motion In Lawsuit Against Binance

The U.S. Securities and Exchange Commission (SEC) recently filed a sealed motion to introduce new documents in its enforcement action against crypto giant Binance. The filing included dozens of documents that the securities regulator sought to keep out of the public domain until trial. 

According to Court Listener, the filing was made with the United States District Court for the District of Columbia in Securities and Exchange Commission v Binance Holdings Limited. The filing comprised 37 supporting documents, including exhibits, supplements, memorandums, and declarations. 

Interestingly, one of the declarations in the sealed filing by the SEC was from Jennifer Farer, a Senior Trial Counsel for the securities regulator. The agency would be able to present the confidential information in the case only after receiving permission from the judge overseeing the lawsuit. The SEC’s decision to hide the information in the latest filing may prompt speculation from the crypto community. 

The SEC sued Binance and its founder Chanpeng Zhao on June 5, 2023, for securities law violations. The regulator accused the world’s largest crypto exchange of operating an unregistered national securities exchange, broker-dealers, and clearing agencies. It also charged Binance US’ operator, BAM Trading, with the unregistered offer and sale of the BNB token. 

The securities regulator alleged that Zhao and his crypto conglomerate were commingling customers’ assets with corporate funds and diverting the same for personal use. The complaint further alleged that they misled investors and misrepresented the trading controls in the crypto exchange. 

Earlier this month, Binance filed for a protective order against what it described as the SEC’s “overbroad” and “unduly burdensome” requests for information. The crypto exchange told the Columbia District Court that it had provided sufficient information to the SEC, but the securities regulator refused to limit its requests. 

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