SEC Seeks Court Intervention as Binance.US Refuses to Release Information

SEC Seeks Court Intervention as Binance.US Refuses to Release Information

The US Securities and Exchange Commission (SEC) has stepped up its investigation into Binance.US, the US division of the international cryptocurrency exchange Binance Holdings Ltd., in response to claims of regulatory non-compliance and possible violations of US securities laws. This is part of a larger legal dispute between the SEC and Binance companies, which also includes Changpeng Zhao, the creator of the firm, and the parent company.

Binance Entangled in a Web of Deception

Binance has been accused of several offences by the SEC in their case since last year, including providing unregistered securities and mismanaging consumer cash. The main focus of the inquiry is whether foreign workers had access to the assets of American clients, which may have violated legal regulations.

Binance.US, doing business with BAM Trading Services, was charged by the SEC for allegedly withholding material information about the custody of client funds in a recent joint status report to a Washington, D.C. District Court. Despite the court order, the SEC claims that Binance.US has been “unable or unwilling” to comply with regulatory requirements to demonstrate ownership over these assets.

After Denial, Binance Cries Financial Losses

Rejecting the SEC’s allegations, Binance.US stated that it complied with requests for documents and provided proof of its ownership of customer assets. Still, the SEC is not happy, claiming a lack of openness and a refusal to answer important questions about asset management.

The regulatory conflict highlighted the difficulties big exchanges have in navigating the legal seas at a time when the cryptocurrency business is booming. Concerns regarding investor protection and market integrity have been highlighted by the US’s purported inability to satisfactorily respond to regulatory inquiries.

Binance.US Layoffs

Meanwhile, Binance’s post-SEC operations COO Christopher Blodgett stated that from June 2023, there has been a significant workforce decrease of over 200 and that this has corresponded with the removal of $1 billion in assets. Amidst rising expenses, revenues fell by more than 75%.

The founder, Changpeng “CZ” Zhao, Binance, and Binance.US were sued by the SEC in June for allegedly selling unregistered securities and combining client funds into another business. Binance admitted to breaking laws against money laundering and the funding of terrorism when it consented to a $4.3 billion settlement with the US Department of Justice. Zhao is due for a criminal sentence hearing on April 30 after admitting to money laundering allegations.

Author: Simeon

Simeon is a seasoned crypto writer with a passion for exploring the fascinating world of blockchain and digital currencies. With a background in finance and technology, Simeon brings a unique perspective to his writing, delving into the complexities of decentralized finance, cryptocurrency trading, and emerging blockchain projects.