Judge asks Binance.US and SEC to simmer down in dispute over documents

Quick Take

  • The SEC has asked for certain information around customer assets, but said BAM, the company behind Binance.US, has so far not obliged. 

A D.C. district judge encouraged Binance Holdings Limited and the Securities and Exchange Commission to work together as the agency pushes for more information on how customer assets are handled at Binance.US. 

Tempers have flared over the past few weeks, as the SEC said BAM, the company behind Binance.US, had "slow-rolled" producing documents. On the flip side, Binance.US has said the agency's request for documents has been "overly broad" and "unduly burdensome." 

"I need you all to try to turn down the temperature and forget the past and try to give me some of what you think you can figure out,” Judge Zia Faruqui of the U.S. District Court for the District of Columbia said on Monday during a hearing. 

The SEC has asked for certain information around customer assets but said BAM has so far not obliged. Meanwhile, BAM has pushed back on the SEC’s requests, calling many of them too broad or burdensome in an unsealed court filing on Monday.

Financial statements

The SEC is asking for information around the custodying customer assets including "disaster recovery policies," maintaining control of the crypto asset wallets and BAM's financial statements, including its general ledger. 

BAM said it would "produce its general ledger as of a mutually agreed upon date."

The agency too has asked for information about Ceffu, which the SEC says is a "newly rebranded Binance Entity" that appears to control customer assets. 

The SEC sued the exchange and its founder Changpeng "CZ" Zhao for violating multiple federal securities laws in June, and said they misrepresented the oversight of the Binance.US platform. 

The SEC and BAM agreed to an October 12 hearing and to the filing of a joint status report by October 10. 

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