A US federal judge has rejected the Securities and Exchange Commission’s request for access to Binance.US’s software and other documentation, Bloomberg reported on Sept.18.
The SEC filed a lawsuit against Binance.US in June, claiming the company was operating unlawfully and mishandling customer funds. On Sept. 18, the regulatory authority again filed a request, alleging insufficient cooperation and information sharing from Binance.US.
The SEC reported that Binance.US’s holding company, BAM Trading, had only submitted 220 documents, many of which contained unclear screenshots and lacked signatures or dates.
At the court hearing on Monday, the SEC anticipated obtaining instant access to the cryptocurrency firm’s tech infrastructure and compelling the exchange to provide additional witnesses and documents for the investigation. Nonetheless, Federal Magistrate Judge Zia Faruqui declined the regulator’s request.
“[I’m not] inclined to allow the inspection at this time.”
Moreover, the judge proposed that the SEC should send more comprehensive discovery requests to Binance.US and speak with more witnesses. According to the SEC, Binance has restricted it to only four witnesses. The company argued that the extra individuals requested by the SEC did not have sufficient knowledge of the subject matter.
The SEC also claimed that the company gave wrong info to the court about its link to Ceffu (formerly Binance Custody). The regulator believes the platform might have been used to move US clients’ money out of the country. The judge agreed that the platform should explain its connection with Ceffu.
“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.”
The next Binance vs. SEC hearing is set for October 12. Until then, they will follow the court’s instructions.
Binance.US Volume Drops From Billions To Millions
Several key executives have left the Binance.US in the past few weeks, and trading activity has declined significantly. Weekly trading volume on the platform has dropped from nearly $5 billion earlier this year to just $40 million, according to data from Kaiko Research.
Moreover, BTC fell back below $27,000, with a loss of around 2% following the recent decision.