United

Request

Impact

<p><strong>The fight between Binance.US and SEC continues as the judge calls for cooperation between them.</strong></p> 
<h2 style="text-align: center;" id="introduction">Introduction</h2> 
<p>A United States judge <a href="https://watcher.guru/news/judge-declines-secs-request-to-inspect-binance-us" target="_blank" rel="noopener">has decided not to grant</a> the Securities and Exchange Commission’s (SEC) request to examine Binance.US. This decision was reached during a court hearing held on September 18, where the SEC was not asked to withdraw its demand for more documents.</p> 
<h2 style="text-align: center;" id="judge-calls-for-cooperation">Judge Calls for Cooperation</h2> 
<p>In the second quarter of 2023, the SEC accused Binance and its founder, Changpeng Zhao (CZ), of operating an unlicensed securities exchange. Since then, the SEC has been working to ensure that the assets of Binance.US customers remain in the United States.</p> 
<p>Rather than making an immediate ruling against either party, the judge has called for collaboration. The judge urged both parties to cooperate on their discovery requests. Magistrate Judge Zia Faruqui stated, “I’m not going to order from the bench right now that they produce or not produce things. Let’s continue to try to work this out. I just want to keep things moving.”</p> 
<blockquote class="twitter-tweet"> 
 <p dir="ltr" lang="en">The SEC failed to win immediate access to inspect Binance US software in ongoing lawsuit against crypto exchange <a href="https://t.co/frYUbaqVwB">https://t.co/frYUbaqVwB</a></p> 
 <p>— Bloomberg Crypto (@crypto) <a href="https://twitter.com/crypto/status/1703917678874841395?ref_src=twsrc%5Etfw">September 18, 2023</a></p>
</blockquote> 
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p> 
<h2 style="text-align: center;" id="sec-s-concerns-and-binance-s-response">SEC’s Concerns and Binance’s Response</h2> 
<p>The SEC’s primary concern is Binance.US’s ability to safeguard customer funds. The SEC has also been seeking additional information regarding Binance’s relationship with its service provider, Ceffu.</p> 
<p>Binance.US has criticized the SEC for not providing evidence that customer funds were mishandled. The exchange has labeled the SEC’s request for further discovery as “unduly burdensome” and “excessive.” Binance’s lawyers argue that the burden of complying with these depositions outweighs any potential benefits. They also contend that the SEC’s discovery requests are disproportionate to the needs of the Consent Order.</p> 
<h2 style="text-align: center;" id="the-latest-hearing">The Latest Hearing</h2> 
<p>In the most recent hearing, the judge asked Binance.US for more information about its current custody solution. Judge Faruqui expressed doubts about whether Binance.US had complete control over its assets, saying, “I think we need more than we’ve got right now.”</p> 
<h2 style="text-align: center;" id="judge-rejects-immediate-inspection">Judge Rejects Immediate Inspection</h2> 
<p>Today’s decision by Judge Faruqui marks a partial setback for the SEC in its quest for a comprehensive investigation into Binance.US. The judge has declined the SEC’s request for immediate access to Binance.US’s software and other documentation. Instead, he has called for more specific discovery requests and a broader range of witnesses to be engaged.</p> 
<blockquote class="twitter-tweet"> 
 <p dir="ltr" lang="en">– The US Securities and Exchange Commission (SEC) has been denied immediate access to inspect <a href="https://t.co/qEan7xLYGD">https://t.co/qEan7xLYGD</a>‘s software by a federal magistrate judge.<br> – The SEC has been struggling to obtain information from <a href="https://t.co/qEan7xLYGD">https://t.co/qEan7xLYGD</a> since it sued the exchange, its…</p> 
 <p>— Kareem (@KareemFarid) <a href="https://twitter.com/KareemFarid/status/1704043511916515503?ref_src=twsrc%5Etfw">September 19, 2023</a></p>
</blockquote> 
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p> 
<h2 style="text-align: center;" id="ongoing-legal-battle-and-impact-on-binance-us">Ongoing Legal Battle and Impact on Binance.US</h2> 
<p>This decision comes amidst <a href="https://walletinvestor.com/magazinadmin/binance-us-not-cooperating-with-investigation-us-sec-says-in-filing/" target="_blank" rel="noopener">ongoing legal scrutiny</a> of Binance.US, which has faced declining trading volumes and the departure of key executives since the SEC initiated its lawsuit. The SEC’s request for an investigation into Binance.US was denied, but the exchange is required to provide additional documentation. The legal battle continues as both parties seek to protect their interests.</p> 
<h2 style="text-align: center;" id="conclusion">Conclusion</h2> 
<p>In summary, a US judge has refused the SEC’s immediate request to inspect Binance.US. The judge has called for more focused discovery requests and collaboration between the SEC and Binance.US. This decision has implications for the ongoing legal battle between the SEC and the cryptocurrency exchange.</p>

SEC’s Request to Inspect Binance.US Declined by US Judge

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