- The U.S. District Judge rejected the SEC’s request for an inspection of Binance U.S. documents
- The request was related to access to documentation and communication with its custodial service providers
Binance U.S., the American wing of the world’s largest crypto exchange – Binance, has taken a small win home today. The crypto exchange has been in the spotlight ever since the U.S. Securities and Exchanges Commission (SEC) launched a lawsuit against it. On one hand, the firm saw its trading volume tumble, on the other hand, members of its C-suite have bid goodbye.
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SEC’s case against Binance U.S.
Amidst the ongoing drama, the crypto exchange successfully held its stance against the SEC earlier today (18 September). The commission had earlier made a plea for an inspection into Binance U.S. The SEC based its case on claims that the Ceffu – a custody platform – was in fact a Binance-related entity.
Additionally, the regulator claimed this was used to move U.S. customers’ funds out of the country. Hence, violating the previous agreement between the firm and the commission. The commission particularly wants to inspect the firm’s documents and communications with its wallet custody service providers. The filing read,
“But even this limited discovery has revealed that BAM still cannot credibly explain its crypto asset wallet custody arrangements. And BAM has continued to provide the SEC with conflicting information concerning Defendant Binance Holdings Limited’s (“BHL” or “Binance”) role, and that of a Binance-related entity called “Ceffu,” in the custodying of Customer Assets.”
The court made its stance clear
Against the latest developments, the crypto exchange argued that the commission’s request was “overboard,” adding that it was an inconvenience. And, the U.S. D.C District Judge – Zia Faruqui eventually rejected this inspection plea made by the SEC.
However, the court also asked the crypto exchange to present more documentation. Judge Faruqui also expressed a lack of confidence in the crypto exchange’s control over its assets.