Binance.US, the U.S. arm of the global cryptocurrency exchange, has responded strongly to the United States Securities and Exchange Commission (SEC) in an ongoing legal dispute. The exchange's attorneys has filed sealed documents today on September 12 opposing the SEC's motion to compel, deeming many of the SEC's demands "unreasonable" and "unduly burdensome."

Unreasonable Depositions: BAM's Arguments against CEO and CFO Testimonies

In their opposition, BAM Trading Services, which operates Binance.US, asserted that the SEC's requests for information and interrogatories were overly broad and beyond the scope of the consent order. They argued that the SEC's insistence on obtaining detailed information and conducting depositions of BAM's CEO, Brian Shroder and the CFO, Jasmine Lee was unreasonable.

BAM's legal team contended that Shroder and Lee had no unique knowledge regarding the custody and transfer of customer assets at Binance.US, making their depositions unnecessary. They also pointed out that other witnesses, such as BAM's Chief Information Security Officer, Erik Kellogg could provide more insight into the exchange's operations.

The attorneys emphasized that the burden imposed by these depositions outweighed any potential benefit. The requested discovery was disproportionate to the needs specified in the consent order.

Lack of Evidence: BAM Contests SEC's Assertions on Asset Diversion

BAM challenged the SEC's allegations that customer assets had been diverted, stating that the SEC had "no evidence to support its unsubstantiated allegations." They described the SEC's claims as misleading and mistaken.

BAM's response comes following a joint motion, agreed by both Binance and the SEC, to file confidential information under seal. This agreement, made on September 11, restricts access to certain material, allowing only the judge, attorneys, plaintiffs, and defendants to view confidential and non-public information.

Navigating Legal Challenges: Binance's Ongoing Battle with U.S. Regulators

Finance Magnates reported in mid-August that an ongoing legal battle between Binance's entities and the SEC, a federal judge has referred the matter to the magistrate court. The SEC had requested information from Binance.US regarding user asset custody and security, which the exchange deemed irrelevant to the case. Binance's legal team previously filed a protective order to counter what they viewed as the SEC's excessive data demands. This order aims to limit employee depositions to four and exclude the CEO and CFO.

The legal dispute began when the SEC accused Binance and its CEO of orchestrating deceptive practices, including inflated trading volumes and the diversion of funds. To protect investors' funds, there have been negotiations conducted while allowing the exchange to operate under regulatory supervision.

Amid these legal challenges, Binance has experienced a decline in market share among top-tier exchanges, falling from 80% to around 68% this year, according to CCData.

The legal battle between Binance.US and the SEC continues, with both sides firmly entrenched in their positions, and makes it a closely watched case in the cryptocurrency industry.