In a recent development, the U.S. Securities and Exchange Commission (SEC) faced a setback in its ongoing legal tussle with Binance.US. A federal magistrate judge denied the SEC’s request for immediate access to the crypto exchange’s software. This decision came amidst the SEC’s allegations that Binance.US has been uncooperative in their investigation, producing only a limited number of documents and restricting witness depositions.
The SEC’s pursuit of Binance.US, known formally as BAM Trading Services Inc, has been marked by challenges. The regulator accused the exchange of “half-hearted claims of irrelevance, prejudice, and burden.” The SEC’s primary contention is Binance.US‘s alleged involvement in the sale of unregistered securities, a case initiated on June 5 against the exchange, its global affiliate Binance Holdings Ltd, and CEO Changpeng “CZ” Zhao.
Binance.US‘s trading operations have seen a significant downturn, with its monthly trading volume plummeting by 98% from January to August 2022, as per CCData. This decline was accentuated by the suspension of trading for over 100 token pairs on the platform, severely impacting investor confidence.
Internal challenges have further plagued Binance.US. Key personnel have resigned, including CEO Brian Shroder and other executives like Krishna Juvvadi (Head of Legal) and Sidney Majalya (Chief Risk Officer). The SEC highlighted the rapid departure of Binance.US staff as a pressing concern, emphasizing the urgency of their investigation.
The SEC’s scrutiny of Binance and its US affiliate Binance.US is not isolated. In March, the U.S. Commodity Futures Trading Commission (CFTC) accused Binance CEO Changpeng Zhao of regulatory violations. This was followed by the SEC’s allegations in June, which included claims of misrepresented trading controls on the Binance.US platform.
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