Binance.US Fights Back: Motion for Protective Order Referred to Magistrate Judge

<p>The Federal judge presiding over the civil case between
the Securities and Exchange Commission (SEC) and Binance's entities has decided
to refer the matter to the magistrate court. The legal matter is part of the
recent development where Binance.US, the American arm of the global
cryptocurrency exchange Binance, has initiated a legal battle that could
reshape its ongoing dispute with the regulator.</p><p>According to a report by
Cointelegraph, Federal Judge Amy Berman Jackson referred the pivotal motion to
Magistrate Judge Zia Faruqui for deliberation yesterday (Wednesday). At the
center of the legal tussle lies the SEC's demands for information from
Binance.US, specifically regarding the custody, security, and availability of
users' assets.</p><p>While the regulator
insists that this information is pertinent to its case filed in June, which
revolved around <a href="https://www.financemagnates.com/cryptocurrency/sec-charges-binance-ceo-over-illegal-exchanges-commingling-of-client-fund/" target="_blank" rel="follow">alleged
unregistered securities offerings</a>,
Binance.US contends that such requests are not relevant to the legal matter.</p><p>Strategic Defensive Move?</p><p>On August 14,
Binance.US's legal team lodged a motion for a protecting order, highlighting
its order to counteract the SEC's purported 'fishing expedition', a term
describing broad information requests by the regulator. The company's parent
company in the US, BAM Trading, along with BAM Management, filed the protective
order in the US District Court of Columbia.</p><p>According to Binance, it
has already provided sufficient information to the regulatory body, and the
protective order aims to curb the SEC's demands. As stated by Reuters, the
exchange aims to limit the number of depositions from BAM's employees to four,
and it intends to drop the depositions of BAM's Chief Executive and Chief
Financial Officer.</p><p>Legal Battles on
Multiple Fronts</p><p>The legal battle between
Binance and the SEC stems from a lawsuit filed in June by the US regulator,
accusing the exchange and its CEO Changpeng Zhao of orchestrating a "web
of deception." The lawsuit encompasses a range of allegations, including
claims that Binance inflated trading volumes, diverted customers' funds, and
failed to restrict US customers from its platform.</p><p>In June, <a href="https://www.financemagnates.com/cryptocurrency/binanceus-and-the-sec-negotiate-to-avoid-total-asset-freeze/" target="_blank" rel="follow">Finance
Magnates</a> reported that
Binance.US and the SEC have <a href="https://www.financemagnates.com/cryptocurrency/binanceus-and-the-sec-negotiate-to-avoid-total-asset-freeze/" target="_blank">entered
into negotiations</a> aimed
at preventing a comprehensive freeze of the exchange's assets. The objective of
the negotiations was to strike an agreement that safeguards investors' funds
while allowing the exchange to continue with its operations under the
regulator's watch.</p><p>Meanwhile, Binance has <a href="https://www.financemagnates.com/cryptocurrency/rise-of-the-crypto-underdogs-low-tier-exchanges-gain-market-share-after-binance-falters/" target="_blank">faced
a downturn in market share</a> due
to ongoing regulatory battles. According to CCData, exchanges rated as
top tier by the industry research provider, which signifies robust protection
measures for customers' funds and security standards, have collectively seen a
decline in market share from 80% to around 68% since the year began.</p>

This article was written by Jared Kirui at www.financemagnates.com.