- Binance files a motion in court to issue a protective order against the SEC.
- The motion comes following the regulator’s deposition notice and recovery request.
- The platform asserts that the SEC is engaged in a fishing expedition instead of a narrow discovery.
Binance, the world’s largest cryptocurrency exchange, filed a court motion on Monday, requesting a protective order against what it described as a “fishing expedition” by the Securities and Exchange Commission’s (SEC). The motion came following the regulator’s deposition notice and recovery requests, which refute the notion that Binance has not provided adequate information to the SEC.
The court filing was submitted by BAM Trading, the holder of Binance.US alleging the SEC’s move against the company has been “over-broad” and “unduly burdensome”. Reflecting on the regulator’s requirements, BAM Trading asserted, “The SEC is conducting a fishing expedition instead of seeking the narrow and ‘limited’ discovery authorized by the Consent Order to ensure customer assets are presently secure and available”.
BAM reiterated that the SEC’s position is “unreasonable” as the regulators seem indifferent to the platform’s efforts to provide sufficient evidence and documents concerning the latter’s request. The platform stated:
BAM has offered four witnesses for depositions, including the two best positioned to address questions about the custody and security of customer assets, and is willing to conduct targeted searches for communications on relevant issues on the condition that the SEC identify specific issues that it believes merit discovery of electronic communications.
While the SEC has asked for the deposition of six of BAM’s employees and senior executives including its Chief Changpeng Zhao, the motion intends to limit the deposition to four employees. The company also requested the court to prevent the regulators from questioning witnesses on matters beyond the consent order at the time of depositions. Highlighting BAM’s requirement on excluding the CEO and Chief Financial Officer from the depositions, BAM said:
Now, the SEC is also demanding depositions of BAM’s most senior executives despite that they do not have unique firsthand knowledge about the facts surrounding the security, custody, and transfer of customer assets, and the employees who do have been offered for depositions.
In related news, the ongoing legal battle between Binance and SEC has proven a thorn in the side of Binance’s growth. As per a recent report, it was revealed that the SEC’s regulations could adversely impact the platform’s goal of global expansion.
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