Lifting the Veil on Binance’s Operations
In a significant development in the dispute over documents between the SEC and Binance, federal judge Zia Faruqui took a firm stance during a recent hearing in Washington, D.C. Instead of dictating terms to either party, he encouraged both the SEC and Binance.US, a branch of the global entity Binance, to work together on the discovery requests that have been central to the ongoing legal battle. Emphasizing collaboration, Faruqui asked the SEC to clarify its information requests while also urging Binance.US to be more explicit about its ties to its service provider, Ceffu.
I’m not going to order, from the bench, that they produce or not produce certain things. Let’s continue trying to find a solution. I just want things to move forward.
Federal Judge, Zia Faruqui
Raising Suspicions about Binance’s Operations
At the heart of the SEC’s concerns is a strong suspicion regarding Ceffu’s proximity to Binance Holdings Limited, its global affiliate. A binding agreement requires Binance.US and its parent company, BAM Trading, to keep all funds of U.S. customers in wallets only accessible by U.S. personnel. To dispel these concerns, Faruqui stressed the need for Binance to clarify its current custody arrangements. This insistence comes in the context of concerns about BAM’s full control over their assets, indicating a deep need for a more transparent operational structure.
Legal representatives weigh in
Representing Binance.US, Matthew Martens of Wilmer Hale disputed the SEC’s broad document requests as impractical. In contrast, SEC attorney Jennifer Farer emphasized the regulator’s requirement for extensive details regarding Binance.US’s new wallet system to conduct a thorough investigation.
As the case progresses, two important dates are looming: October 10, marked for a joint status report, followed by a crucial follow-up hearing on October 12. These events signify critical moments in a case where the protection of U.S. customers’ assets remains paramount, calling for a balanced approach that combines rigorous regulatory scrutiny with corporate transparency.
