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Binance US, referring to most of the SEC‘s requests as “illogical” and “unnecessarily burdensome,” has responded to the Securities and Exchange Commission’s (SEC) enforcement and response demand. The legal battle between Binance US and the SEC continues regarding the baseless allegations and coercive requests implying the diversion of customer assets by the SEC.
Prompt Response from the SEC to the Allegations
On September 12, attorneys from BAM Trading Services, which operates the Binance US cryptocurrency exchange, submitted sealed documents to the SEC requesting further details from Binance US. The defendants argued that the SEC’s production and interrogation requests were excessively broad, unnecessarily burdensome, and beyond the scope of the consent order. BAM’s attorneys claimed that the SEC’s demand for testimony from BAM CEO Brian Shroder and CFO Jasmine Lee was “illogical.” They stated that the SEC did not provide any evidence of Shroder and Lee’s involvement in the daily management details related to the storage and transfer of customer assets at Binance US.
The attorneys stated that BAM’s CEO and CFO do not have unique knowledge about the limited matters specified in the consent order for expedited discovery. They also mentioned that BAM has provided several witnesses who have more information about BAM’s operations, including BAM’s Chief Information Security Officer Erik Kellogg. The attorneys noted:
“The burden imposed by these statements outweighs their potential benefits, and the requested discovery is disproportionate to the needs contemplated by the consent order.”
Misleading and Inaccurate Claims by the SEC
The attorneys also argued that the SEC has no evidence to support its baseless claims implying the diversion of customer assets. According to the defendants, the SEC’s claims, which form the basis for its cross-motion, are “misleading and inaccurate.” The attorneys also stated that there is a complete disconnect between the SEC’s overly broad and abusive approach and the limited expedited discovery accepted by the regulator in the consent order.
BAM’s response came shortly after SEC and Binance’s agreement on a protective order requiring the parties to submit sealed confidential information. The plaintiff and defendants filed a joint motion on September 11, committing to file confidential and non-public information as protected materials and restricting access to the judge, attorneys, plaintiffs, and defendants.
