In response to the U.S. Securities and Exchange Commission (SEC), Binance has issued a “protective order,” according to a report by Bloomberg on August 16th. Although accurately predicting the outcome is challenging, there is a possibility of reaching a compromise where Binance will comply with most of the SEC’s requests, as noted by John Reed Stark, a former SEC official.
SEC has filed a lawsuit against Binance, presenting 13 allegations related to inflating trading volumes and misusing customer funds. One of the main points of contention is Binance’s claim that they have provided sufficient evidence to assure the SEC about the security of customer assets. However, the SEC persists in proposing inspection requirements that Binance deems overly complex and burdensome.
According to Stark’s Twitter post, “Among many allegations, Binance asserts that they have provided enough evidence to assure the SEC about the safety and security of customer assets. However, the SEC still proposes inspection requirements that are ‘overly complex and overly burdensome’ on the defendants.”
Binance has expressed disappointment and criticized the SEC’s investigation as an “inappropriate fishing expedition” unrelated to the true value of the matter. The conflict is overseen by the court, led by Judge Amy Berman Jackson of the DC District Court, operating under a unique Consent Order model, including provisions for “expedited discovery.”
Stark indicates that Judge Jackson will direct Binance to provide the majority of what the SEC requests but eliminate some repetitive or overly burdensome demands. During this process, Binance may secure some minor victories, which they will undoubtedly amplify as significant achievements.
However, the unfolding situation could take unforeseen turns when the U.S. Department of Justice (DOJ) reveals the indictment related to Binance. This action could disrupt the civil litigation between Binance and the SEC.