Binance strikes back at the SEC and seeks a protective order against a “fishing expedition.”
Binance, one of the largest crypto exchanges in the world, accused the United States Securities and Exchange Commission of a “fishing expedition” and requests a protective order against the agency.
According to the court filing, Binance accused the SEC of “serving incredibly overbroad and unreasonable discovery requests” of the documents related to customer assets.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
Hot VS Cold Wallet: Which One Do YOU Need? (Animated)
On August 14th, the crypto exchange filed for a protective order against the SEC to limit its probing into Binance’s records that fall outside of the scope of the Consent Order from early June.
Binance claims that the SEC is seeking documents that are unrelated to the ongoing investigation into customer assets. Among the files requested by the agency is communication dating back to November 2022 that reportedly has nothing to do with customer assets. The agency also requested depositions from at least six Binance employees, including the CEO Changpeng Zhao and the CFO.
In the filing, Binance stated that the SEC is overstepping its authority regarding customer asset information:
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.
The company also argued that it had already provided sufficient information to the regulator, including the depositions of two employees “best positioned to address questions about the custody and security of customer assets,” but the SEC allegedly declined this proposition.
The goal of a protective order is to keep the number of depositions of Binance employees to four instead of six (excluding the CEO and CFO) and to prevent “requests for all communications about various topics.”
In June, the SEC accused Binance of running an illegal securities exchange and asked the court to issue a temporary restraining order to freeze Binance.US assets; however, the parties later settled on a consent order that provides greater transparency over the company.