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Binance.US not cooperating with the inquiry, US SEC says in a filing

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According to a court filing yesterday, September 14, the United States Securities and Exchange Commission (SEC) has alleged that Binance.US is not cooperating with the ongoing investigation into the cryptocurrency exchange.

In its court filing, the SEC pointed out that Binance.US’s holding company, BAM, has provided just 220 documents during the discovery process.

READ ALSO:Coinbase CEO Urges DeFi Firms to Take CFTC in Court Over Its Recent Enforcement Actions

Moreover, many documents submitted under the Consent Order are described as unclear screenshots and documents needing proper dates or signatures.

BAM declined to make key witnesses available

Furthermore, the SEC stated that BAM has declined to make key witnesses available for deposition, opting instead to agree to only four depositions of witnesses that it unilaterally considers appropriate.

Additionally, BAM has responded to requests for relevant communications with broad objections and has refused to hand over documents typically maintained during regular business operations, asserting that such documents do not exist. However, the SEC has obtained these documents from other sources.

The SEC also expressed apprehensions regarding Binance.US’s utilization of Ceffu, a wallet custody software offered by the global entity Binance Holdings Ltd.

According to the SEC, BAM provided conflicting statements about Ceffu’s role and Binance’s involvement in managing the wallet and customer funds.

Initially, BAM asserted that Ceffu was its provider of wallet custody software and services, but later, it claimed that Binance was the provider of BAM’s wallet custody software.

This inconsistency in statements raised concerns among regulators about the cryptocurrency exchange’s use of Ceffu, potentially infringing on a prior agreement designed to prevent the diversion of funds to foreign entities.

An overview of the SEC lawsuit filing against Binance

On June 5, the SEC commenced a lawsuit against Binance, bringing forth 13 charges against the cryptocurrency exchange. These charges encompassed allegations related to unregistered securities offerings, specifically targeting products like Simple Earn and BNB Vault and their staking program.

The SEC contended that Binance.com, Binance.US, and BAM Trading should have registered as clearing agencies, broker-dealers, and exchanges.

Furthermore, the unregistered offering and sale of Binance.US’ staking-as-a-service program obligated BAM Trading to register as a broker-dealer.

These recent allegations by the SEC have surfaced during internal turmoil at the exchange. Binance.US CEO Brian Shorder departed, adding to the list of high-ranking Binance executives who have left the company this year.

Shortly after that, the head of legal and the chief risk officer of the exchange also resigned. As of now, Binance.US has yet to provide an immediate response to requests for comments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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