Binance is asking for court protection against regulatory requests it has deemed too broad.
The crypto exchange, locked in a legal battle with the U.S. Securities and Exchange Commission (SEC), filed for a protective court order late Monday (Aug. 14) asking for relief from what it called the regulator’s “stunningly overbroad and unduly burdensome requests.”
The company — described in court documents as BAM, the name of Binance’s U.S. operating unit — argued it had provided sufficient information to the SEC, and asked a judge to limit the agency’s depositions to four Binance employees.
“The SEC has not explained why deposing BAM’s CEO and CFO would be within the relevant scope of the Consent Order,” the filing said, adding that “the SEC’s position reinforces why deposing BAM’s CEO and CFO would be improper because they have no articulable basis for deposing them other than to conduct a fishing expedition.”
A spokesperson for the SEC declined to comment when reached by PYMNTS.
The SEC filed charges against Binance in June, part of a larger crackdown on the crypto sector that included another suit — filed the same week — against Coinbase, and part of what PYMNTS recently described as a “humbling 12 months” for the industry.
The commission alleges that Binance, the largest cryptocurrency exchange in the world, and founder Changpeng Zhao on June 5, committed a variety of securities law violations.
The SEC’s charges include operating as unregistered exchanges, brokers, dealers and clearing agencies; making unregistered offers and sales of crypto assets; failing to restrict U.S. investors from accessing Binance.com; and misleading investors.
Binance responded with a blog post saying it was “disappointed” with the SEC’s action because the company had cooperated with the regulator’s investigations and hoped to reach a negotiated settlement.
The weeks since then have seen the company deal with an array of bad news, from declining market share to layoffs to a number of setbacks in Europe, including its recent decision to pause its attempts to get a crypto license from Germany.
Binance, Zhao and former Chief Compliance Officer Samuel Lim are also facing a lawsuit from the Commodity Futures Trading Commission (CFTC), which claims the company was operating in violation of the Commodity Exchange Act and related regulation.
The CFTC’s suit, filed in March, described Binance as an “illegal” exchange with a “sham” compliance program.
In a motion to dismiss the case last month, Binance argued that its holding company is located in the Cayman Islands, and CEO Zhao is a Canadian citizen, meaning the CFTC’s claims should be dropped.
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