In the ongoing legal battle between Binance.US and the U.S. Securities and Exchange Commission (SEC), a federal judge has denied the SEC’s request to access the cryptocurrency firm’s technology infrastructure. The decision comes after Binance.US lawyers argued that the SEC’s demand for documents was overly broad, setting the stage for further proceedings in the case.
Federal Magistrate Judge Zia Faruqui presided over the hearing and made the pivotal decision not to grant the SEC access to Binance.US’s technology infrastructure at this time. In a statement during the hearing, Judge Faruqui expressed, “[I’m not] inclined to allow the inspection at this time,” and proposed that the SEC should formulate a more specific request and conduct additional witness interviews to refine their pursuit of information.
The SEC had initially filed for expedited discovery, a legal procedure aimed at swiftly obtaining crucial information before the standard discovery process begins, as part of its lawsuit against Binance. This move followed accusations that Binance.US was uncooperative in the SEC’s investigation, as revealed in court documents unsealed just last week.
Allegations against Binance
The SEC’s complaint alleges that both Binance.com and Binance.US should have registered as an exchange, broker-dealer, and clearing agency. The regulatory body contends that these entities operated an unlicensed securities exchange and generated substantial revenues totalling at least $11.6 billion in fees from U.S. customers since July 2017.
Judge Faruqui has scheduled the next hearing in this high-stakes legal battle for October 12, where further proceedings and discussions will likely take place. The outcome of this case could have profound implications for the cryptocurrency industry and its regulation within the United States.
