Binance and SEC Locked in Dispute Over Court Evidence

Binance dispute with the United States Securities and Exchange Commission (SEC) continues to linger on and seems all but over. As revealed in a joint status report filed on January 25,there are disagreements over the production of evidence and the deposition of key witnesses.

The SEC alleges that Binance’s parent company, BAM Trading Services, hasn’t fully met its discovery obligations. This includes providing evidence related to the custody and liquidity of assets, echoing concerns similar to those raised in the FTX case. The SEC is scrutinizing whether Binance.US had control over customer assets in a comparable manner.

BAM’s legal team insists they have complied with all document production demands as required by the consent order and expedited recovery request. They stress that the SEC’s extensive demands have caused harm and burden over the past seven months.

The nature and extent of the SEC’s investigation are at the heart of this dispute. BAM contends that the SEC is overstepping the boundaries set by the consent order, which they believe should limit the investigation to confirming the safety and proper accounting of customer assets. They accuse the SEC of an overly broad investigation into BAM’s custody policies and practices.

Another key issue is the deposition of former BAM executives, presumably Brian Shroder and Jasmine Lee. BAM argues against further depositions, pointing out that the SEC has already deposed numerous witnesses.

The case also discusses the potential deposition of Binance co-founder Changpeng Zhao. Disagreements persist over the specifics of this deposition, including its scope and timing. Zhao resigned as Binance’s CEO in November 2023 following a settlement with U.S. regulators. His sentencing is scheduled for February 23, 2024.