- The U.S. Securities and Exchange Commission (SEC) has filed a motion to submit confidential documents in its lawsuit against Binance, Binance.US, and CEO Changpeng “CZ” Zhao.
- The move from the SEC follows a protective order request by Binance.US, claiming the SEC is exceeding the agreed-upon consent order between the parties.
The SEC’s Tactical Shift: Filing Under Seal
In a riveting development that amplifies the complexity and stakes in the ongoing U.S. SEC lawsuit against Binance, its U.S.-based entity Binance.US, and CEO Changpeng “CZ” Zhao, the SEC has exercised its right to file documents ‘under seal.’ For the uninitiated, ‘filing under seal’ is a legal maneuver that permits the submission of sensitive or confidential information directly to the court, without making it publicly accessible.
According to the court filing dated August 28, only authorized individuals will have access to these sealed documents. Accompanying the SEC’s motion are 37 supportive submissions, which include exhibits, declarations, and supplements. While the specifics of the filings remain shrouded in secrecy, they feature a declaration from SEC senior trial attorney Jennifer Farer and an exhibit by SEC attorney Matthew Scarlato.
This tactic by the SEC emerges after Binance.US sought a protective order, alleging that the SEC has exceeded the boundaries set by a mutually agreed-upon consent order. Specifically, Binance.US has petitioned the court to preclude the depositions of its CEO and CFO and has vehemently contested the SEC’s demands that, according to them, are unrelated to the case at hand.
The Multi-Front Battles of Binance
The SEC originally filed 13 charges against Binance, its U.S. subsidiary, and CEO Zhao, signaling an intensification in its enforcement action against the world’s largest crypto exchange. This sealed filing can be viewed as a strategic elevation in the SEC’s pursuit, although the exact intent is yet veiled.
Parallel to this, Judge Amy Berman Jackson has ordered Magistrate Judge Faruqui to mediate the existing dispute between Binance.US and the SEC.
It’s worth noting that Binance has sought to dismiss the SEC lawsuit altogether, following the lead of Ripple’s partial victory and Coinbase’s motion to dismiss their respective SEC lawsuits. However, former SEC official John Reed Stark anticipates that a forthcoming lawsuit from the U.S. Department of Justice (DOJ) could effectively neutralize Binance’s dismissal ambitions.
Given the sealed nature of the SEC’s latest filings, one can only speculate on the next turns this high-stakes legal drama may take. Nonetheless, the move clearly indicates a ramping up of efforts from the regulatory body.
