The U.S. Securities and Exchange Commission (SEC) is accusing Binance of holding back information during the discovery phase of the regulator’s lawsuit against the crypto exchange.
In a new court filing, the regulatory agency says that Binance refuses to cooperate and is only providing “extremely limited information” even though the court has issued a consent order.
“More than two months later and despite repeated good faith attempts by the SEC to reach further compromise with BAM (Binance), the SEC finds itself essentially where it was when it first sought relief from the Court.
BAM continues to refuse, even in light of the consent order, to provide anything beyond extremely limited information to ensure that BAM’s customer assets are not at the mercy of Defendants Binance Holdings Limited and [Binance CEO] Changpeng Zhao, two persons who view themselves outside the reach of the Court.”
The SEC says that it wants to make sure that all Binance customers’ crypto assets are accounted for and under their control. However, according to the regulatory body, Binance has thus far provided limited or “unintelligible” information, also refusing to produce essential witnesses for deposition.
“Following entry of the Consent Order, the SEC issued discovery requests focused on information sufficient to provide assurances that all customer and BAM assets are properly accounted for, within BAM’s exclusive control in the United States, available for withdrawal to satisfy customer liabilities, and not subject to control by Binance Entities.
BAM has produced only approximately 220 documents, many of which relate to reporting otherwise required under the Consent Order, and many that consist of unintelligible screenshots and documents without dates or signatures. Further, BAM has refused to produce essential witnesses for deposition, instead agreeing only to four depositions of witnesses it has unilaterally deemed appropriate.”
The SEC initially sued Binance in June, claiming that the top crypto exchange platform by volume was offering unregistered securities. At the time, the SEC alleged that Binance and Zhao profited billions of dollars while ignoring customer safety protocols.