Global cryptocurrency exchange Binance has taken a significant step in its ongoing dispute with the U.S. Securities and Exchange Commission (SEC) by requesting legal protection.
Binance filed a complaint on August 14, asserting that the SEC’s demands for discovery, stemming from a June court order, have exceeded their intended scope.
Binance argues that the SEC’s requests for documents, based on the June directive granting insight into Binance’s custody and security practices for customer assets, have gone far beyond the agreed-upon limits.
The exchange maintains that numerous documents demanded are only tangentially relevant, if at all, to customer assets.
In its filing, Binance emphasizes its willingness to cooperate in good faith, citing its offer to provide depositions from senior employees responsible for customer funds.
However, the SEC has not accepted this offer, and Binance expresses concern about the regulator’s expanding interpretation of the June order:
“At bottom, the SEC is conducting a fishing expedition instead of seeking the narrow and ‘limited’ discovery authorized by the Consent Order to ensure customer assets are presently secure and available.”
Binance’s request for protection aims to curtail the scope of the SEC’s demands. The exchange suggests that depositions be limited to four key exchange employees, excluding high-ranking officials like Zhao or its CFO.
Furthermore, Binance seeks to confine the scope of questioning to matters directly related to the June order, preventing broad investigations unrelated to customer assets.
This latest development follows the SEC’s lawsuit against Binance and its U.S. branch, Binance.US, in June. The lawsuit alleges that Binance operated an unregistered securities exchange and conducted associated sales without proper registration.
In addition to the SEC’s legal action, Binance faces regulatory challenges from the Commodity Futures Trading Commission (CFTC), which claims that the exchange knowingly violated CFTC rules.