The judge’s consent comes after accusations that Binance US failed to show ‘Transparency’ in the SEC’s probe. A court filing showed that on Friday, a judge at the district court approved the Securities and Exchange Commission’s (SEC) motion to open documents in the ongoing proceedings against Binance US.
Court Grants SEC Authority to Unseal Documents on Binance Lawsuit
In August, the regulator filed the information under seal, restricting access to lawyers participating in the lawsuit. Nevertheless, the agency sought to make numerous documents public on Thursday. This includes exhibits for a declaration made by Jennifer Farer, SEC’s Trial Counsel. The agency claimed that the lawsuit’s involved parties had agreed to open several documents.
This approval comes following the agency accusing Binance US of ‘lacking transparency’ and the firm experiencing numerous recent departures by executives. On Friday, Changpeng Zhao, Binance’s chief executive officer, regretted that Brian Shroder, Binance US chief executive officer will be leaving office.
According to Zhao, Brian’s achievements warranted a break, and Norman Reed, Binance US’ Chief Legal Officer was the most suitable individual to guide Binance US.
In June, the Securities and Exchange Commission sued Binance by accusing it of contravening securities regulations. Reportedly the SEC accused the SEC of operating an unregistered securities exchange. In an earlier report, the agency also highlighted the rerouting of billions of dollars of client funds in an account belonging to Merit Peak and run by Zhao.
A day following the lawsuit’s filing, the SEC pursued an emergency order freezing Binance US’ assets to restore client confidence.
Binance Faces Charges Whose Outcome Could Reshape the Cryptocurrency Industry
An agreement between the SEC and Binance US was made not long following its prevention of a freeze in exchange for more oversight and transparency. Part of the deal’s demand entailed Zhao or any entities he controlled or owned lacking access to the funds.
In one court filing, the SEC accused BAM, Binance US’s holding firm, of generating just 220 documents associated with its probe. That entailed ‘incoherent screenshots that failed to ensure that BAM’s client assets are not under Binance’s or Zhao’s control. The commission also asserted that Ceffu, Binance HoldingsLtd,wallet custody software service, seemed to control BAM’s crypto assets through an arrangement.
A separate filing containing a footnote backing the SEC’s suggestion to unseal documents stated that FGMK, BAM’s executive auditor, has generated more than 6500 documents that ‘mainly related to BAM’s ownership and management of its assets.’ Further, the agency claimed that BAM’s auditor provided a letter to the agency concerning Ceffu’s supposed role in custodying client assets.
The filing disclosed that the SEC failed to learn of the existing BAM’s auditor’s concerns
communicated through its June letter until the auditor’s document production was received in July this year. Judge Zia M. Faruqui of Washington, D.C., told the court’s clerk to reveal the numerous exhibits fully.
At the same time, they were instructed to disclose other document with totally or partly erased information publicly.
Judge Faruqui observed that the report indicated that the motion to unseal documents as the SEC demanded was not against the sealing or partial sealing of those identified by Binance as ‘private.’
The Judge gave Binance US, respondents, and other ‘nonparties’ a week to explain why specific documents require the designation.
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