A week after the Securities and Exchange Commission (SEC) filed a civil enforcement action against Binance.US, the crypto exchange has hit back, saying that all of the regulator’s claims are invalid.
Binance argued against the SEC for a temporary restraining order on the company, also known as BAM Trading, and said that such an action would have “disastrous consequences”, which it later defended against this action. will affect the platform’s ability to fund
Binance Hits Back
In its latest filing, Binance’s US affiliate argued that the agency has not identified a single security trade on BAM’s platform. The request for a restraining order would primarily harm BAM’s customers, effectively put BAM out of business, and prevent the company from subsequently defending itself in this lawsuit.
Calling the SEC’s request “harsh and unduly burdensome,” Binance.US said the move would affect its ability to pay its employees, vendors, suppliers and professionals in the ordinary course of business and maintain its technology platform. Obstacles will come.
“The SEC suggests it is a foregone conclusion that cryptocurrency is a security, but it is not. Several cryptocurrency exchanges, including BAM, have operated in the United States for years without SEC interference, contradicting the claim that they are securities. are explicitly covered by the laws.
Binance.US further stated that the SEC’s proposal is “full of errors” and fails to unreasonably assume that BAM customer assets are “not safe.”
Cooperation with the SEC
Binance.US claimed that it has made significant efforts over more than three years to cooperate with the SEC’s investigation. BAM Trading was first served with a subpoena on December 17, 2020, resulting in over two years of document production, as well as a series of follow-up requests.
This includes additional summons issued on five occasions between September 2021 and October 2022 and a set of twenty-eight written inquiries dated December 28, 2022.
According to the filing, Binance submitted several informal written and oral requests for investigation. During this period, the company produced over 700,000 individual communications, consisting of approximately 11,391 emails, 8,196 email attachments and 652,817 other messages.
The crypto exchange’s complaint about not fully cooperating with the SEC echoed similar issues faced by its rivals that draw attention to the regulatory agency’s failure to provide clarity. Last week, Robinhood Chief Legal Officer Dan Gallagher also said that the popular trading firm tried to register with the agency as a special-purpose broker for digital assets and even went through a 16-month process. but “saw no fruit of that effort.”
Coinbase Chief Legal Officer Paul Grewal also expressed his dismay over the matter. The exec said Coinbase failed to secure the registration despite months of discussions and attributed the lack of a response or any counter-offer from the SEC.
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