Summary:
- Binance’s U.S. division, BAM Trading, is resisting the SEC’s document requests, claiming they are overly broad and burdensome.
- The SEC’s demands encompass a wide range of records related to BAM Trading’s business practices and financial status.
- BAM Trading’s legal team argues that the requests are unduly burdensome and that some documents are irrelevant to the SEC’s investigation.
- Despite the pushback, the SEC is determined to obtain the requested documents and has accused BAM Trading of obstructing its investigation.
In a legal showdown with the U.S. Securities and Exchange Commission (SEC), Binance U.S. division, BAM Trading, is firmly resisting regulators’ demands for access to its internal documents, further escalating the conflict over the exchange’s business practices. This recent development was unveiled in a court filing made on Monday, shedding light on the crypto exchange’s efforts to shield certain records from the SEC, citing the agency’s requests as excessively broad and burdensome.
Pushback Against Overbroad Document Requests
BAM Trading, the operating entity behind Binance.US, is taking a defiant stance against the SEC’s extensive document requests. According to legal representatives of BAM Trading, the SEC’s demands for records have crossed the line into being “overbroad” and have created an “inconvenience” for the exchange. The court filing submitted by BAM Trading’s lawyers contends that the SEC’s document requests lack specificity, are ambiguous, and constitute an undue burden on the exchange.
Also Read: Binance US Operations Under Scrutiny: The Inside Story
The SEC had originally sought a wide array of documents from BAM Trading, encompassing records related to the handling of customer assets, statements verifying the company’s reserves, and an overall assessment of its financial well-being. However, BAM Trading appears to have disregarded these requests, sparking further tension between the exchange and the regulator.
Allegations of Undue Burden and Irrelevance
One of the focal points of the SEC’s inquiry concerned BAM Trading’s purported use of a custody service named Ceffu to transfer U.S. customers’ funds abroad, which allegedly violated the terms of the agreement. Nevertheless, BAM Trading’s lawyers argued that these requests were excessively taxing on the exchange, imposing substantial financial burdens.
Furthermore, the legal team asserted that certain documents were either beyond the exchange’s possession or fell outside the scope of relevance to the SEC’s ongoing investigation. Such arguments are not uncommon in cases where companies under federal investigation attempt to resist broad and cumbersome document requests, although success in these efforts varies. Typically, such pushback can lead to significant delays in the legal proceedings.
Despite the resistance from BAM Trading, the SEC remains resolute in its pursuit of the requested documents. On the same Monday as the court filing, the SEC filed a complaint alleging that BAM Trading had deliberately impeded the agency’s investigation by providing limited document production and obstructing access to certain categories of information pertaining to the exchange’s custody of customer assets.
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