The United States Securities and Exchange Commission (SEC) has accused Binance US Branch of obstructing its ongoing investigation into the cryptocurrency exchange. In a court filing dated September 14, the SEC expressed frustration with Binance US Branch lack of cooperation.
According to the filing, Binance US Branch holding company, BAM, has provided a meager 220 documents during the discovery process. These documents were criticized for containing unintelligible screenshots and lacking essential details like dates or signatures.
The SEC further alleged that BAM has been uncooperative in producing key witnesses for deposition. Instead, the company has only agreed to the deposition of four witnesses it deemed appropriate and has responded to requests for relevant communications with blanket objections. Additionally, BAM has refused to produce documents that are typically part of its regular business records, claiming they do not exist. However, the SEC later obtained some of these documents from other sources.
The SEC also raised concerns regarding Binance US Branch use of Ceffu, wallet custody software provided by Binance Holdings Ltd. BAM provided conflicting statements about Ceffu’s role and Binance’s involvement in wallet and customer funds management. Initially, BAM claimed Ceffu was its wallet custody software provider, but later stated that Binance fulfilled this role. The SEC expressed concern that this usage of Ceffu may violate a prior agreement aimed at preventing fund diversion abroad.
The SEC’s lawsuit against Binance, filed on June 5, includes 13 charges against the exchange, such as unregistered securities offerings, Simple Earn, BNB Vault products, and its staking program. The SEC argued that Binance, Binance US Branch, and BAM Trading should have registered as clearing agencies, broker-dealers, and exchanges, respectively. The unregistered offer and sale of Binance US Branch staking-as-a-service program required BAM Trading to register as a broker-dealer.
These latest allegations from the SEC come amidst internal turmoil at Binance US Branch . CEO Brian Shorder recently resigned, joining a growing list of top Binance executives who have left the firm this year, including the head of legal and the chief risk officer.