Binance Battles SEC Over "Overly Broad" Information Requests

Dan Nicholson

One of the world's leading cryptocurrency exchanges, Binance, took a bold step against the U.S. Securities and Exchange Commission (SEC). The move comes in response to what Binance perceives as an overreach by regulators in its data requests.

The Heart of the Matter

Binance filed a protective order in the U.S. District Court of Columbia against the SEC. The central complaint? The crypto giant believes the regulator's demands for information are "over broad" and "unduly burdensome". BAM Trading, which operates Binance U.S., along with BAM Management, stress that they have already furnished the SEC with ample information.

The sought protective order isn't just a matter of principle. Binance aims to restrict the SEC to a mere four depositions from BAM employees and wishes to exclude the depositions of BAM's top leadership, including its CEO and CFO. Names, however, remained undisclosed in the filings.

Binance's Allegations Against the SEC

Coin Telegraph's reporting offers more insights into Binance's grievances. The exchange accused the SEC of launching a "fishing expedition" through its discovery requests. In essence, Binance claims that the regulator is venturing far outside the agreed scope outlined in the lawsuit filed against them.

Binance's position is that, while they have adhered in good faith to a June court order, the SEC's demands seem excessive. These include requests for "every single document in [Binance’s] possession related to customer assets". Binance argues the demand grants the SEC an unfettered right to probe into all of BAM’s asset custody practices.

The Earlier SEC Lawsuit

This skirmish goes back to June, when U.S. regulators, armed with a 13-charge list, took on Binance and its CEO, Changpeng Zhao. The accusations were severe: the company allegedly engaged in deceptive practices, manipulated trading volumes, mishandled customer funds, and more.

However, Binance’s recent filing underscores a crucial point: the SEC has yet to furnish concrete evidence indicating misuse or dissipation of customer assets.

What's at Stake for Binance

Binance's ongoing tussle with the SEC has broader implications. The SEC's extensive discovery requests include a demand for all Binance communications dating back to November 2022 on a wide array of topics, not limited to customer assets. Additionally, the regulator wants to depose six of Binance's key players, including CEO Changpeng “CZ” Zhao.

Binance contends that its senior executives aren't the right individuals to provide the detailed information the SEC seeks, especially concerning the "security, custody, and transfer of customer assets". The exchange emphasizes it has already offered the deposition of senior employees directly responsible for customer funds, an offer the SEC did not act upon.


For entrepreneurs and investors, this situation serves as a reminder of the complexities and potential pitfalls in the crypto space, emphasizing the importance of transparency, cooperation, and foresight. As the saga unfolds, many will be watching keenly to see how the courts navigate these uncharted waters.



Coin Telegraph

Dan Nicholson is the author of “Rigging the Game: How to Achieve Financial Certainty, Navigate Risk and Make Money on Your Own Terms,” deemed a best-seller by USA Today and The Wall Street Journal. In addition to founding the award-winning accounting and financial consulting firm Nth Degree CPAs, Dan has created and run multiple small businesses, including Certainty U and the Certified Certainty Advisor program.

No items found.
No items found.
Next Up In
No items found.
Banner for Certainty Tools, Play your Game.  Blue gradient color with CertaintyU Logo
No items found.
No items found.