SEC’s requests have not been limited to the discovery of Binance’s custody, security and availability of customer assets alone.
Binance has filed for the court to grant it a protective order against the United States Securities and Exchange Commission. This follows after the financial regulator has made several attempts to lay its hands on all of Binance’s documents that may have anything to do with customer assets.
Binance Takes Issues with SEC’s Multiple Requests
According to the August 14 filing, Binance suggested that the regulator’s requests are more like undertaking a “fishing expedition”.
Recall that in June, Binance agreed to a Consent Order with the SEC. This was after the regulator initially attempted to freeze all of its assets, citing concerns over the safety of customer funds.
The exchange now believes that, while it has worked tirelessly in line with that same order, the SEC may have misunderstood the essence of it in the first place. Part of the filing reads:
“BAM has worked in good faith, but the SEC has been steadfast in its belief that the Consent Order gives it carte blanche to investigate every aspect of BAM’s asset custody practices without any discernible limitation whatsoever.”
Binance also claims that since the June order, it has handed over information about customer assets to the SEC. And while the SEC is yet to find any evidence of misuse, the request still feels ‘inappropriate’ in that it has no bearing on the ongoing suit.
But the requests have not been limited to the discovery of Binance’s custody, security, and availability of customer assets alone. Binance claims that the SEC is also requesting all communications dating as far back as November 2022 for topics that seemingly have no relevance to customer assets.
And, lastly, the regulator is also asking the exchange to produce six of its employees, including CEO Changpeng Zhao (CZ), for deposition. Interestingly, Binance claims that it has offered the depositions of senior employees in positions that are directly associated with customer funds. However, so far, the SEC has appeared unimpressed about the offer.
Defending its top executives and the decision to produce other employees for the deposition, Binance says:
“They do not have unique firsthand knowledge about the facts surrounding the security, custody, and transfer of customer assets.”
Details About the Protective Order
Overall, there are three major things that Binance seeks to achieve with the protective order, if it’s granted. It hopes to limit the SEC to deposing four employees that would not include CZ or the exchange’s chief financial officer. The order would bar the SEC from asking questions beyond matters outside of the order. And, lastly, it would also stop requests for communications about things not related to customer assets.
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Source: https://www.coinspeaker.com/binance-sec-protective-order/