In a court filing dated September 14, the United States Securities and Exchange Commission (SEC) has alleged that Binance.US, the cryptocurrency exchange, is failing to cooperate with the ongoing investigation.
The SEC, in its filing, revealed that Binance.US’s holding company, BAM, has provided only 220 documents during the discovery process, many of which were described as “unintelligible screenshots” lacking dates or signatures. Moreover, BAM has been accused of refusing to make essential witnesses available for deposition, agreeing only to four depositions of witnesses it independently deemed appropriate.
The SEC stated, “It has responded to requests for relevant communications with blanket objections and has refused to produce documents kept in the ordinary course of its business, claiming those documents do not exist, only for the SEC to later receive such documents from other sources.”
Additionally, the SEC expressed concerns regarding Binance.US’s use of Ceffu, wallet custody software provided by the global entity Binance Holdings Ltd. According to the SEC, BAM initially claimed that Ceffu was its wallet custody software provider but later stated that Binance filled that role. The regulator raised questions about whether this usage of Ceffu violated a previous agreement designed to prevent funds from being diverted abroad.
The SEC initiated legal action against Binance on June 5, pressing 13 charges against the crypto exchange. These charges included allegations of unregistered securities offerings related to products such as Simple Earn and BNB Vault, as well as issues concerning its staking program. The SEC argued that Binance.com, Binance.US, and BAM Trading should have registered as clearing agencies, broker-dealers, and exchanges, respectively. The unregistered offer and sale of Binance.US’ staking-as-a-service program also required BAM Trading to register as a broker-dealer.
These latest allegations from the SEC add to the challenges facing Binance.US, which has been dealing with an internal crisis. The departure of key executives, including CEO Brian Shorder, has raised concerns, along with the resignations of the head of legal and the chief risk officer at the exchange in quick succession.
Binance.US has not yet provided an official response to these accusations.
