SEC Accuses Binance.US of Lack of Transparency
- The SEC charged Binance in June with violating several US laws.
- The US regulator claimed Binance.US produced irrelevant documents and failed to provide key witnesses.
- Binance has continued to deny the SEC’s claims and plans to defend itself in court.
The U.S. Securities and Exchange Commission (SEC) accused Binance.US of a lack of transparency in a recent filing. The commission noted that the crypto exchange failed to comply with its investigations, adding that Binance US’ holding company, BAM, only provided 220 documents during the investigation process.
The SEC said some of these materials were “unintelligible screenshots and documents without dates or signatures.” The commission also slammed BAM for failing to produce key witnesses for deposition. Instead, the regulator claimed BAM only consented to four depositions of witnesses. The regulator said in its filing:
It has responded to requests for relevant communications with blanket objections and has refused to produce documents kept in the ordinary course of its business, claiming those documents do not exist, only for the SEC to later receive such documents from other sources.
The SEC’s new complaints come months after it filed a lawsuit against Binance, accusing the exchange of violating 13 laws, failing to prevent U.S. users from accessing its global platform, and functioning as an unlicensed exchange and clearing agency, among other things.
The SEC, in its recent filing, also expressed worries about customer funds being in Binance Global’s custody wallet, Ceffu. The US regulator argued that, based on previous agreements, customer assets were not to be shared with other Binance entities but instead controlled by BAM and within the US.
In addition, the SEC noted that BAM failed to provide adequate proof that customer funds are not at the mercy of Binance CEO Changpeng Zhao. The commission claimed that Ceffu controlled customer assets “through their role in the establishment of wallets and key shards related to BAM Customer Crypto Assets.”
The SEC’s allegations against Binance US come amid the departure of a number of the company’s top executives. Binance has lost some of its core employees across the globe this year.
Most recently, Binance.US announced the departure of its Chief Risk Officer (CRO) and the Head of Legal. The exchange has, however, maintained that these departures are a part of its systemic change and not a sign of doom.