Binance.US Deems SEC’s Demands ‘Unduly Burdensome’
In response to the United States Securities and Exchange Commission’s (SEC) motion to compel and reply, Binance.US has characterized most of the SEC’s requests as “unreasonable” and “unduly burdensome.” This development follows a joint motion by both parties to file confidential information under seal.
BAM Trading Services Challenges SEC’s Demands
On September 12, attorneys representing BAM Trading Services, the operator of Binance.US cryptocurrency exchange, submitted sealed documents contesting the SEC’s efforts to obtain further details from Binance.US. In their argument, the defendants contended that the SEC’s requests for production and interrogatories were “overly broad” and “beyond the scope of the consent order.” They specifically took issue with the SEC’s demand for certainty and the call for depositions of BAM CEO Brian Shroder and Chief Financial Officer Jasmine Lee, deeming these requests “unreasonable.”
CEO and CFO’s Limited Involvement
BAM’s attorneys emphasized that the SEC’s motion failed to identify any evidence indicating that Shroder and Lee played a significant role in the day-to-day management aspects related to the custody and transfer of customer assets at Binance.US. They asserted that other witnesses, including BAM’s Chief Information Security Officer Erik Kellogg, possess more relevant insights into BAM’s operations and should be considered instead.
Furthermore, BAM’s legal team challenged the SEC’s claims, stating that the regulator had “no evidence to support its unsubstantiated allegations” regarding the diversion of customer assets. They criticized the SEC’s allegations as “misleading and mistaken.”
Disconnect Between Approaches
The attorneys argued that a “complete disconnect” existed between the SEC’s “overbroad and abusive approach” and the limited expedited discovery specified in the consent order to which the regulator had previously agreed. They contended that the burden imposed by the depositions of Shroder and Lee outweighed any potential benefits, given their limited involvement in the matters at hand.