Binance.US Blasts SEC Over ‘Freewheeling’ Requests for Depositions


Binance.US is pushing back against a Securities and Exchange Commission (SEC) request for discovery and depositions.

The company — the American affiliate of cryptocurrency giant Binance — said an SEC motion asking for more information and testimony by Binance.US executives is “unduly burdensome” and “freewheeling,” CoinDesk reported Tuesday (Sept. 12), citing court documents.

Binance.US also said the SEC, which is prosecuting Binance for several alleged securities law violations, has yet to show that customer funds were unlawfully diverted, the report said.

“Even after all of the discovery already produced by BAM during the expedited discovery period, the SEC still has no evidence to support its unsubstantiated allegations that imply investor assets have been somehow diverted,” the company wrote, referring to the name of Binance’s U.S. operating unit. “All the evidence in this matter — including documents, declarations and sworn deposition testimony — supports BAM’s position that it has custody and control of its digital assets.”

The SEC declined to comment.

The regulator filed charges against Binance in June, part of a broader crackdown on the crypto sector that included another suit — filed just a day later — against Coinbase, and part of what PYMNTS has termed a “humbling past 12 months” for the industry.

The regulator accused Binance, the largest cryptocurrency exchange in the world, and founder Changpeng Zhao of charges that include operating as unregistered exchanges; making unregistered offers and sales of crypto assets; failing to keep American investors from accessing; and misleading investors.

Writing on its blog, Binance responded by saying it was “disappointed” with the SEC’s action, arguing the company had cooperated with the commission’s investigations and hoped to come to a negotiated settlement.

The SEC had also initially tried to freeze Biance.US’s assets, although the two sides eventually worked out an arrangement to prevent that from happening while still protecting customer funds.

According to CoinDesk, Biance.US’s filing questions the extent of requests by the SEC, including documents dealing with the company’s custody software and wallet solutions.

“The SEC has still not articulated why depositions of BAM’s CEO and CFO fall within the scope of the consent order,” the exchange wrote, per the report. “The burden imposed by these depositions far outweighs their potential benefit, and the discovery sought is disproportionate to the needs contemplated by the consent order.”

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.