Former SEC Official Weighs In on Binance.US’ Request for Protection
Binance.US, the parent company of cryptocurrency exchange Binance, recently requested a protective order to prevent securities regulators from making excessive demands. However, according to a former official, the company’s grounds for the request may be questionable.
In its initial filing, Binance.US complained that the Securities and Exchange Commission (SEC) had demanded an excessive amount of information and depositions from its employees. In response, Binance.US sought a protective order that would limit the SEC’s inquiries and allow only four employees to be deposed, excluding the CEO and CFO. These requests are all related to an ongoing case initiated by the SEC against Binance in June.
While the court has yet to address Binance.US’ request, former SEC Office of Internet Enforcement chief, John Reed Stark, shared his insights on the matter. Stark believes that both parties have asked for too much. He suggests that a compromise will likely be necessary to reach an agreement.
Stark also mentioned that the SEC had previously obtained a consent order or temporary restraining order against Binance.US. This allows for expedited discovery, requiring courts to resolve disputes more quickly than usual. Additionally, he predicted that Judge Amy Berman Jackson would pass the matter to a magistrate judge, which indeed happened later on when Judge Jackson filed the motion to Magistrate Judge Zia M. Faruqui.
Moreover, Stark anticipates that the U.S. Department of Justice (DOJ) will soon release an indictment related to Binance, further complicating the SEC’s case. Reports have been circulating since at least August 2, suggesting that DOJ charges against Binance are forthcoming.
The outcome of Binance.US’ request for a protective order is still pending, but with input from a former SEC official, both parties will likely need to find common ground. As the case progresses, the involvement of the DOJ may further complicate matters for Binance. The cryptocurrency industry continues to face increased scrutiny from regulatory authorities, highlighting the need for cooperation and compliance.
