- Binance’s cryptocurrency exchange says the regulator overstepped its authority in enforcing the consent order.
- SEC obtained it in June 2023 after a court refused to freeze the funds of Binance.US and CEO Changpeng Zhao.
- The consent order calls for all data related to the platform’s customer funds holding practices to be turned over to the regulator.
The cryptocurrency exchange Binance has filed a petition with the court for a protective order. The company believes the Securities and Exchange Commission (SEC) has overstepped its authority.
The complaint says the regulator’s requests are “overbroad” and “unduly burdensome”:
“BAM [Binance’s parent company] operated in good faith, but the SEC was unwavering in its belief that the consent order gives it carte blanche to investigate all aspects of its asset custody practices without restraint.”
Remember, the court issued a consent order regarding this case in June 2023. Prior to that, the SEC had raised concerns about the safe custody of assets held by clients of the exchange’s U.S. unit and demanded that the counterparty’s accounts be frozen.
Binance responded by saying that Binance.US would effectively suspend operations in such a case. The consent order, which requires disclosure of certain corporate information, was a compromise of sorts.
In a new motion, Binance is asking the court to limit the regulator’s requests to testimony from four employees who are directly responsible for holding user funds.
If the court issues the order, the commission will not be able to question the exchange’s CEO Changpeng Zhao and CFO Slokenbergs Vilnis. It would also limit the list of data available to the agency under the previous deal.
And it would limit the list of data available to the agency under the previous deal.