Key SEC vs. Binance Documents to be Unsealed

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  • Key documents in the SEC vs. Binance.US legal battle have been ordered to be unsealed by Magistrate Judge Zia Faruqui
  • The SEC last week complained of a lack of transparency from Binance.US
  • The exchange was his with 13 charges by the SEC in June

Key documents in the legal battle between the Securities and Exchange Commission (SEC) and Binance.US are set to be unsealed following a recent legal victory for the exchange. The SEC had filed this information under seal in August, limiting access only to the attorneys involved in the lawsuit, but the agency took steps to make several documents, including exhibits for a declaration by SEC Trial Counsel Jennifer Farer, public last week. Magistrate Judge Zia Faruqui ordered the documents to be released on Friday following the SEC’s allegations of a lack of transparency from Binance.US.

13 Charges Against Binance.US

The SEC initiated its lawsuit against Binance and Binance.US in June, accusing the exchange of violating securities laws with 13 charges, including operating as an unregistered securities exchange. In its initial complaint, the SEC also alleged that billions of dollars of customer funds were commingled in an account controlled by Zhao-linked entity Merit Peak, with the agency seeking an emergency order to freeze Binance.US’s assets to protect customer funds shortly afterwards.

This, however, was rejected by US District Judge Amy Berman Jackson who stated that there was “absolutely no need” for a freeze on the company assets. A deal was reached requiring greater transparency from Binance.US and barring Binance CEO Changpeng Zhao or his controlled entities from accessing the funds.

SEC Unimpressed With Binance.US Transparency

It seems, however, that Binance.US has not been as forthcoming as the SEC was expecting; last Thursday it alleged that Binance.US’s holding company, BAM, had produced only 220 documents to date during the discovery process, among which were “unintelligible screenshots and documents without dates or signatures.”

Whether or not this alleged intransigence played into the judge’s thinking is not clear, but Judge Faruqui instructed the court’s clerk to unseal more than a dozen exhibits in full while making other exhibits publicly available with redacted information, either partially or completely.

She added that she will unseal all the documents unless she is given convincing explanations by Binance.US for why specific documents deserve the ‘confidential’ designation.