Challenges Arise with Documentation and Beyond: Unveiling Transparency Issues

The US Securities and Exchange Commission (SEC) has accused Binance of failing to provide sufficient documentation despite previously agreeing to expedited discovery. The SEC’s legal representatives have filed a new claim stating that many of the documents submitted by BAM, Binance’s US affiliate, consist of “unintelligible” screenshots that lack necessary dates or signatures.

This development comes in the midst of the ongoing legal battle between Binance and the SEC. On June 5th, the SEC initiated legal action against Binance, bringing a total of 13 charges against the platform. These charges include violations of US securities laws and the failure to prevent unauthorized access to by US investors who have not properly registered as an exchange, broker, or clearing agency.

In a significant twist, the SEC has accused Binance of non-cooperation in the ongoing investigation, as revealed in unsealed documents. The SEC also claims that BAM has refused to make essential witnesses available for deposition, opting to provide only four depositions of its own selected witnesses. Furthermore, the SEC has raised concerns about Binance.US’s use of Ceffu, a custody service offered by Binance Holdings Ltd, which may be in violation of a previous agreement to prevent the transfer of assets abroad.

The SEC has pointed out conflicting statements made by BAM regarding the roles of Ceffu and Binance in wallet management and customer funds. Initially, BAM claimed that Ceffu served as its wallet custody software and service provider, but later stated that Binance fulfilled that role.

In June, Binance sent a letter to its staff, anticipating a prolonged and costly legal battle with the SEC. As a result, Binance requested Binance.US management to downsize the workforce. Since then, several high-ranking executives, including CEO Brian Shorder, have departed from the company.

It is clear that Binance is facing significant challenges as it continues to navigate the legal proceedings and address the concerns raised by the SEC. The outcome of this courtroom drama will have substantial implications for Binance and the broader cryptocurrency industry as regulators aim to ensure compliance and protect investors.

(Sources: [1])

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J-S Tremblay
About the author - J-S Tremblay

I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...

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