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The United States Securities and Exchange Commission (SEC) has charged Binance.US with a lack of cooperation in the ongoing investigation into the cryptocurrency exchange, as stated in a court document dated September 14.
In its court submission, the SEC highlighted that BAM, the holding company of Binance.US, has only provided 220 documents during the discovery phase. A significant portion of the documents submitted under the Consent Order “comprises unintelligible screenshots and documents lacking dates or signatures.”
The SEC further indicated that BAM has declined to present key witnesses for deposition, agreeing only to four depositions of witnesses it has independently determined to be suitable, and remarked:
“It has responded to requests for pertinent communications with broad objections and has refused to supply documents maintained in the normal course of its business, asserting that such documents do not exist, only for the SEC to subsequently obtain those documents from alternative sources.”
The SEC also expressed concerns regarding Binance.US’s utilization of Ceffu, a wallet custody software supplied by the global entity Binance Holdings Ltd. The SEC pointed out that BAM has made contradictory statements regarding the roles of Ceffu and Binance in the management of the wallet and customer funds.
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Initially, BAM asserted that Ceffu was its wallet custody software and services provider, but later claimed that Binance was the provider of BAM’s wallet custody software. The regulators expressed concern that the exchange’s use of Ceffu breaches a previous agreement intended to prevent the diversion of funds abroad.
Related: Binance plans new round of layoffs amid increased regulatory scrutiny
The SEC initiated a lawsuit against Binance on June 5, bringing 13 charges against the cryptocurrency exchange, including unregistered securities offerings, the Simple Earn and BNB Vault products, and its staking program. The SEC contended that Binance.com, Binance.US, and BAM Trading should have registered as clearing agencies, broker-dealers, and exchanges, respectively. The unregistered offer and sale of Binance.US’s staking-as-a-service program also necessitated BAM Trading to register as a broker-dealer.
The recent allegations by the SEC against Binance.US arise during a period of internal turmoil at the exchange. Binance.US CEO Brian Shorder has joined the growing list of senior Binance executives departing the company this year, following the resignations of the head of legal and the exchange’s chief risk officer within a matter of days.
Binance.US did not promptly respond to requests for comments.
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