A US District Judge has rejected SEC’s request for an inspection of Binance US documents.
Binance US stood firm on its stance calling the regulatory watchdog’s request “overboard”.
SEC’s request sought access to documentation and communication with the exchange’s custodial service providers.
Binance US, the American branch of the world’s largest cryptocurrency exchange, Binance, achieved a significant victory today amidst ongoing scrutiny. The exchange has been under intense scrutiny ever since the US Securities and Exchange Commission (SEC) initiated a lawsuit against it. This situation led to a decline in trading volume and the departure of key executives from the company.
The SEC’s request for an investigation into the exchange, was denied earlier today by the court.
What is the SEC investigating Binance US for?
The SEC’s argument hinged on the assertion that Ceffu, a custody platform, was, in reality, an entity associated with Binance. Furthermore, the SEC alleged that this entity was employed to transfer funds of US customers out of the country, thereby violating a prior agreement between Binance US and the SEC. The commission specifically sought access to the exchange’s records and communications with its wallet custody service providers. According to a tweet from Adam Cochran, the SEC’s filing stated:
“However, even with this limited discovery, it has become apparent that Binance U.S. (referred to as “BAM”) has not provided a credible explanation for its crypto asset wallet custody arrangements. Furthermore, Binance Holdings Limited (“BHL” or “Binance”) and its alleged relationship with a Binance-affiliated entity named ‘Ceffu’ regarding the custody of Customer Assets have continued to be a source of conflicting information provided to the SEC.”
In response to these developments, the cryptocurrency exchange argued that the SEC’s request was overly intrusive and burdensome.
Ultimately, US District Judge Zia Faruqui rejected the SEC’s request for an inspection. However, the court required Binance US to furnish additional documentation and expressed doubts about the exchange’s ability to maintain control over its assets.
The post US court denies SEC request to look into Binance US appeared first on CoinJournal.