According to a recent court filing, the United States Securities and Exchange Commission (SEC) has accused Binance.US, a crypto exchange, of non-cooperation in an ongoing investigation. The SEC claims that Binance.US’s holding company, BAM, has only provided 220 documents during the discovery process, many of which are unintelligible screenshots without dates or signatures.
The SEC also expressed concerns about Binance.US’s use of Ceffu, a wallet custody software provided by Binance Holdings Ltd. It appears that BAM has made inconsistent statements about the involvement of Ceffu and Binance in the management of wallets and customer funds. This has raised concerns about Binance.US’s compliance with a prior agreement aimed at preventing funds from being diverted abroad.
In addition, the SEC criticized BAM for refusing to produce essential witnesses for deposition. Instead, BAM has only agreed to four depositions of witnesses it deems appropriate. The SEC also noted that BAM has responded to requests for relevant communications with blanket objections and has claimed that certain documents do not exist, only for the SEC to later receive those documents from other sources.
The SEC had initially filed a lawsuit against Binance on June 5, alleging 13 charges including unregistered securities offerings and violations related to various Binance products. The SEC argued that Binance.com, Binance.US, and BAM Trading should have registered as clearing agencies, broker-dealers, and exchanges, respectively. According to the SEC, the unregistered offer and sale of Binance.US’s staking-as-a-service program required BAM Trading to register as a broker-dealer.
These latest accusations by the SEC against Binance.US come at a time when the exchange is facing an internal crisis. The CEO of Binance.US, Brian Shorder, recently left the firm, joining a growing list of top executives who have resigned this year. This includes the head of legal and the chief risk officer of the exchange.
Binance.US has not yet responded to requests for comment on the matter.