The U.S. Securities and Exchange Commission (SEC) notified Binance and its affiliates of its intent to revise its complaint in a major legal case. The amendment targets “Third Party Crypto Asset Securities,” a category mentioned in a previous dismissal motion.
This change aims to streamline the legal process, potentially bypassing the need for the court to assess the current allegations about these tokens. The SEC and defendants Binance, BAM Trading Services, BAM Management U.S. Holdings Inc., and Changpeng Zhao submitted a joint response to a July 9, 2024, court order outlining their positions.
The SEC’s proposal includes a timeline for the motion to amend: the SEC will file within 30 days of the court’s scheduling order, defendants will have 30 days to respond, and the SEC will reply 21 days later.
Subsequent steps include deadlines for the defendants’ answers or Rule 12 motions and responses. A key point of contention is when discovery should begin. The SEC proposes that discovery proceed on the claims that survived the defendant’s motion to dismiss, based on a prior court order from June 28, 2024.
Dispute Over Discovery Timing In SEC vs. Binance
The SEC believes it is reasonable to start discovery immediately, even if the complaint is later amended. This approach would allow the case to progress without waiting for additional motions and potential revisions.
However, the defendants disagree. They argue that starting discovery without seeing the SEC’s proposed amendments is premature. They also object to the SEC’s last-minute changes to the proposed joint status report, which included a suggestion to start discovery without disclosing the amended complaint.
The defendants insist that discovery plans should be discussed only after the SEC files the amendment. They want to review the amendment first. Both parties have agreed on a schedule for filing motions and responses and will meet to finalize a discovery plan once the court resolves the SEC’s motion to amend and any consequent motions.
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