Standing against the atrocities of the United States Securities and Exchange Commission (SEC), Binance has requested for a protective order against the regulator. The exchange reiterated its previous stance criticising the SEC’s enforcement actions.
In its request to the court, the exchange claims the SEC’s deposition and discovery requests are outside the scope of the regulator. The exchange accussed the regulator of undertaking a “fishing expedition” with its discovery requests.
On Monday, Binance filed a motion in the court arguing that while it worked in good faith with a June court order, the SEC has served overly broad and unreasonable discovery requests that seek “every single document in Binance’s possession related to customer assets.” It stated:
“BAM has worked in good faith, but the SEC has been steadfast in its belief that the Consent Order gives it carte blanche to investigate every aspect of BAM’s asset custody practices without any discernible limitation whatsoever.”
Reportedly a court order from June allowed the discovery of Binance’s custody, security and availability of customer assets. However, the exchange says the requests were inappropriate as its asset custody practices weren’t of concern in the SEC’s suit, adding it handed over information about customer assets and the SEC hasn’t given evidence that customer assets have been misused.
Additionally, Binance stated that SEC is demanding to produce all communications dating back to November 2022 for “dozens of topics and many of which has no relation with customer assets.”
In early June, the SEC sued Binance and Binance US alleging it operated an unregistered securities exchange and sold unregistered securities. Zhao was also named as a “controlling person” in the complaint.
To this, the exchange makes six of its employees and officers available for depositions, including CEO Changpeng “CZ” Zhao. The exchange claimed its senior executives “do not have unique firsthand knowledge about the facts surrounding the security, custody, and transfer of customer assets.”
Binance also said it offered the depositions of senior employees with direct responsibility over customer funds, which the SEC seemingly didn’t take. The protective order sought by Binance would limit the SEC to deposing four exchange employees not including Zhao or its chief financial officer. It would also stop the SEC from questioning those deposed about matters outside of the order and halt requests for communications about other topics besides customer assets.
Simultaneously, Binance is also facing a suit from the Commodity Futures Trading Commission alleging that it violated federal commodities laws. To that, the exchange has filed a motion to dismiss the case recently.
Recently, the French authorities revealed that the exchange has been under investigation since February 2022 for operating without a license and for concerns of using crypto assets to facilitate money laundering practices. On top of it, amid the global crackdown, many countries have risen against the exchange including Brazil, Netherlands, France, Austria, Cyprus, and Germany.