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SEC alleges Binance.US non-compliance amid ongoing investigation

TL;DR

  • The SEC accuses Binance.US of not sharing crucial info about customer assets in an ongoing investigation.
  • Binance.US denies SEC’s claims, saying it provided extensive cooperation and thousands of documents.
  • Binance’s legal battles continue, with a settlement reached with the DOJ and Zhao facing potential prison time.

In the latest development of an ongoing investigation, the U.S. Securities and Exchange Commission (SEC) has accused Binance.US, the American arm of the cryptocurrency exchange Binance, of failing to provide crucial information. The SEC alleges that Binance.US has been uncooperative in responding to inquiries regarding the custody of customer assets and other fundamental aspects of the probe.

SEC seeks court intervention

According to a joint status report filed on March 5 in a Washington, D.C. District Court, the SEC claims that BAM Trading Services, operating as Binance.US, has been “unable or unwilling” to address requests for essential information. The regulator has requested court intervention to expedite the discovery process, citing an impasse with Binance.US over key questions.

Central to the SEC’s investigation is the concern that Binance’s non-U.S. arm employees may have had access to customer assets held by Binance. US. The SEC asserts that Binance.US has failed to adequately demonstrate that it did not have access to private keys or other means of accessing customer assets.

In response, Binance.US refuted the SEC’s allegations, asserting that it had complied with the regulator’s requests for information, which it described as “exceptionally broad.” The exchange contends that the SEC’s claims regarding customer assets are unfounded and emphasizes its extensive cooperation with the securities watchdog. 

Binance.US asserts that it has provided thousands of documents related to its asset custody practices, including sworn declarations and monthly reports, and facilitated inspections of shared custody devices involving customer assets.

Legal battles and settlements

This development follows a series of legal challenges Binance and its executives face. In June of the previous year, the SEC filed a lawsuit against Binance, Binance.US, and the exchange’s founder and former CEO, Changpeng “CZ” Zhao, alleging the sale of unregistered securities and commingling of customer assets in a separate firm controlled by Zhao.

Later, on November 21, Binance reached a $4.3 billion settlement with the U.S. Department of Justice, admitting violations of U.S. money laundering and terrorism financing laws. As part of the settlement, Zhao pleaded guilty to money laundering charges. His sentencing hearing is scheduled for April 3, where he faces a potential prison term of up to 18 months.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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