Binance.US has responded to the motion to compel and reply by the United States Securities and Exchange Commission (SEC), criticizing most of the SEC’s requests as “unreasonable” and “unduly burdensome.” In a recent filing, attorneys for BAM Trading Services, the operator of Binance.US cryptocurrency exchange, opposed the SEC’s demand for additional details from Binance.US.
The defendants argued that the SEC’s requests for production and interrogatories are too broad and go beyond the scope of the consent order. They claimed that the SEC’s insistence on certainty and their requests for depositions of BAM CEO Brian Shroder and CFO Jasmine Lee were unreasonable. BAM attorneys also contended that there is no evidence suggesting Shroder and Lee have any involvement in the day-to-day management of customer assets custody and transfer at Binance.US.
The attorneys stated that the SEC’s motion fails to identify any evidence that supports the notion of Shroder and Lee’s involvement in the specific topics outlined in the consent order’s expedited discovery provision. They argued that BAM has offered other witnesses who possess more insight into the operations, such as BAM’s chief information security officer, Erik Kellogg. The attorneys emphasized, “The burden imposed by these depositions far outweighs their potential benefit, and the discovery sought is disproportionate to the needs contemplated by the consent order.”
Furthermore, BAM’s legal team contested the SEC’s allegations that customer assets have been diverted, asserting that there is no substantiated evidence to support such claims. They characterized the SEC’s allegations forming its cross-motion to compel as “misleading and mistaken.”
The lawyers also highlighted a “complete disconnect” between the SEC’s “overbroad and abusive approach” and the limited expedited discovery agreed upon in the consent order.
BAM’s response followed the SEC and Binance coming to an agreement on a protective motion, which requires the parties to file confidential information under seal. This joint motion, submitted on September 11, ensures that access to confidential and non-public information is restricted to the judge, attorneys, plaintiffs, and defendants.
In conclusion, Binance.US has pushed back against the SEC’s requests, deeming them unreasonable and burdensome. The cryptocurrency exchange’s legal team stated that the SEC has provided no evidence to support their claims and that the requests go beyond the scope of the consent order. The ongoing legal battle between Binance.US and the SEC will continue to unfold as both parties present their arguments and evidence in court.