US SEC Alleges Binance.US Lack Of Cooperation In Investigation

According to a court filing by the SEC, Binance.US has submitted a total of 220 documents throughout the discovery process. A significant portion of these submissions comprises “incomprehensible screenshots” and documents that lack clear dates or signatures.

According to a recently filed court document on Sept 14, the United States Securities and Exchange Commission (SEC) has accused Binance.US of showing reluctance in cooperating with the ongoing cryptocurrency exchange investigation.

In its court submission, the SEC emphasized that Binance.US’s parent company, BAM, has provided 220 documents during the discovery process. However, many of these documents submitted under the Consent Order are deemed “incomprehensible screenshots” with unclear dates and missing signatures.

The Securities and Exchange Commission (SEC) has raised concerns about the reluctance of BAM (Business Asset Management) to provide critical witnesses for deposition. Instead, BAM only agreed to four deposits of witnesses they themselves deemed appropriate.

Furthermore, they have objected broadly to requests regarding relevant communications and refused to produce documents typically part of their regular business operations, claiming those documents don’t exist. However, the SEC later obtained such documents from other sources.

SEC’s Concerns: Binance.US Wallet Custody Software Dilemma

The Securities and Exchange Commission (SEC) raised additional concerns about Binance.US’s usage of Ceffu, a wallet custody software provided by the international company Binance Holdings Ltd. Specifically, the SEC highlighted inconsistencies in BAM’s statements regarding the roles of Ceffu and Binance in managing wallets and handling customer funds.

The Securities and Exchange Commission (SEC) announced that initially, BAM asserted Ceffu as its wallet custody software and services provider. However, BAM later clarified that Binance fulfilled the role of its wallet custody software provider.

Consequently, regulators have expressed concerns that this transition from Ceffu to Binance may potentially violate a prior agreement established to prevent the diversion of funds overseas.

The Securities and Exchange Commission (SEC) took legal action against Binance on June 5, filing 13 charges against the cryptocurrency exchange. These charges specifically target unregistered securities offerings, such as Simple Earn BNB Vault and Binance’s staking program.

According to the SEC, Binance.com, Binance.US, and BAM Trading should have followed registration requirements for clearing agencies, broker-dealers, and exchanges. Moreover, because of the unregistered offering and sale of Binance.US’ staking-as-a-service program, BAM Trading is now required to register as a broker-dealer.

The SEC’s recent allegations against Binance.US align with internal upheaval at the exchange. Throughout this year, several prominent executives, including CEO Brian Shorder, have chosen to step down, contributing to a growing list of resignations. In subsequent days, the head of legal and the chief risk officer also submitted their resignations.

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