In a recent legal development that has caught the attention of the cryptocurrency community, Binance.US has vehemently opposed the U.S. Securities and Exchange Commission’s (SEC) requests for additional depositions. Labeling the SEC’s demands as “unreasonable” and “unduly burdensome,” attorneys for BAM Trading Services, the entity that operates Binance.US, filed sealed documents on September 12 to counter the regulatory body’s motion.
The SEC had sought depositions from BAM CEO Brian Shroder and CFO Jasmine Lee, a move that BAM’s legal team found to be excessive. According to the attorneys, the SEC’s requests for production and interrogatories were “overly broad” and went “beyond the scope of the consent order.” They argued that neither Shroder nor Lee had unique knowledge concerning the day-to-day management details related to the custody and transfer of customer assets at Binance.US.
The burden of proof
BAM’s legal team emphasized that the SEC had failed to provide any evidence to support its allegations that customer assets had been diverted. They pointed out that all existing evidence, including documents and sworn deposition testimony, supported BAM’s position that it maintained custody and control of its digital assets. The attorneys also noted that BAM had offered alternative witnesses, such as Chief Information Security Officer Erik Kellogg, who could provide more insights into the company’s operations.
The legal skirmish between Binance.US and the SEC comes on the heels of a protective motion agreed upon by both parties. Filed on September 11, this motion requires the filing of confidential information under seal, restricting access to specific parties like judges, attorneys, plaintiffs, and defendants. This protective order aims to maintain the confidentiality of non-public information during court proceedings.
The ongoing legal battle serves as a critical juncture for both the SEC and Binance.US, as it could set a precedent for future interactions between cryptocurrency exchanges and regulatory bodies. While the SEC continues to tighten its grip on the crypto industry, companies like Binance.US are fighting to ensure that regulatory oversight does not stifle innovation or impose unreasonable burdens. Whether this case will lead to a more harmonious relationship between regulators and the crypto industry remains to be seen, but it undoubtedly marks a significant chapter in the evolving narrative of cryptocurrency regulation.