In recent events, Binance.US, the US companion exchange to global player Binance, reacted strongly to demands from the US Securities and Exchange Commission (SEC), labeling them as overbearing and ‘unreasonable’ in a newly tabled filing. A disagreement seemingly fueled by the SEC’s requests for additional details from Binance.US, a charge originating from earlier allegations of customer funds diversion by the exchange.
The attorneys for BAM Trading Services, the operator of Binance.US, laid out a suite of objections in the filing. Central to their defense is the contention that the SEC’s requirements for production and questioning are ‘overly wide-ranging’, an imposition on time and resources, and ‘beyond the scope of the consent order’. Furthermore, they insist that these requests have not been met with justifiable reasoning or evidence from the regulatory body.
In the spotlight of the SEC’s demands are Brian Shroder and Jasmine Lee, CEO and CFO respectively, of BAM. The commission’s requests are met with skepticism from BAM attorneys who argue that these individuals are not privy to the minutia of customer asset management. In an attempt to alleviate the situation, BAM offered alternatives in the form of witnesses who are better equipped to shed light on BAM’s operations.
At the heart of this disagreement lies a fundamental mismatch of perception. From BAM’s viewpoint, with the SEC’s continued insistence on ‘unsubstantiated allegations’, the SEC’s approach appears ‘overbroad and abusive’. In contrast, the SEC might perceive their approach as diligent and necessary.
This tussle comes close on the heels of Binance agreeing to a protective motion with the SEC. This requires parties to file confidential information already sealed, allowing only certain parties access to the information.
In the larger context, this conflict reflects the high tension that exists between crypto-focused businesses and regulators. On one hand, regulatory bodies have a duty to protect consumer interests and prevent financial wrongdoing. On the other hand, growing crypto businesses require breathing space to test and develop new technologies and business models.
As we continue to chart the course of the crypto industry, striking a balance between protection and innovation will be of paramount importance.
Source: Cointelegraph
