SEC Says Binance.US Isn't Cooperating With Its Investigation, Worries About Assets Being Shifted Overseas

SEC Says Binance.US Isn’t Cooperating With Its Investigation, Worries About Assets Being Shifted Overseas

Updated: 15 September 2023

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The Securities and Exchange Commission (SEC) said cryptocurrency exchange Binance.US isn’t cooperating with its investigation and may be in breach of an earlier deal to prevent it from moving assets overseas.

Binance.US (BAM) has provided the SEC with minimal information in connection with its probe, raising questions about whether it’s violated a consent order, the SEC said in a filing unsealed on September 14.

“BAM has produced only approximately 220 documents, many of which relate to reporting otherwise required under the Consent Order, and many that consist of unintelligible screenshots and documents without dates or signatures,” the SEC said.

The regulator said BAM “responded to requests for relevant communications with blanket objections and has refused to produce documents kept in the ordinary course of its business, claiming those documents do not exist, only for the SEC to later receive such documents from other sources.”

It added that BAM has declined to provide key witnesses for deposition.

The SEC also said that BAM may be violating an agreement to ensure US assets are only accessed by the US arm of the company.

🇺🇸 SEC accuses Binance US of endangering the assets of US citizens!

The Securities and Exchange Commission said that Binance US's betting, clearing and brokerage services violate the Securities Act. pic.twitter.com/3Rby7JuYDJ

— Parad Finance (@ParadFinance) September 15, 2023

In a filing on September 12, BAM lawyers had said the SEC’s requests for information go “beyond the scope of the consent order,” and are “overly broad” and “unduly burdensome.” They added that requests to depose CEO Brian Shroder, who has since left the company, and chief financial officer Jasmine Lee, were “unreasonable.”

“BAM’s CEO and CFO have no unique knowledge regarding facts relevant to the limited topics identified in the consent order’s expedited discovery provision,” the lawyers said.

Binance.US in Turmoil

The SEC and Binance have been in a legal battle since the regulator filed a lawsuit against the crypto exchange in June for offering unregistered securities.

The court drama is unfolding as Binance grapples with an exodus of its top executives. Thirteen staff have left since since July with three departures this week and four the week before.

Head of legal, Krishna Juvvadi, and chief risk officer, Sidney Majalya, are the latest executives to exit the crypto exchange’s revolving door, the Wall Street Journal reported, citing people familiar with the matter. The exchange lalso lost Binance.US CEO Brian Shroder this week and slashed a third of its staff, or about 100 workers.

🚨Binance US Chief Risk Officer, Sidney Majalya, as well as Head of Legal, Krishna Juvvadi, resign following increased pressure from regulators❗️

They follow Binance US CEO Brian Shroder who left the company on Monday.

— Lara Gibson (@GibsonLara62958) September 14, 2023