Breaking: Judge’s Ruling on Recent Submissions in Binance vs. SEC Legal Battle

Breaking News: Judge Sets Hearing Date

In the ongoing legal dispute between Binance and the US Securities and Exchange Commission (SEC), Magistrate Judge Zia M. Faruqui has scheduled a hearing date for two significant motions. The hearing is set to take place on September 18, 2023, at 1:00 PM ET and will address Motion 95, the Protective Order, and Motion 102, which seeks to compel and reply in further support of BAM Defendants’ Motion for a Protective Order (Redacted). Both of these motions were filed by BAM Management and BAM Trading Services, affiliates of Binance US.

John Reed Stark, former Chief of the SEC Office of Internet Enforcement, provided insights into the complexities of the case via a recent tweet. He highlighted Binance’s US affiliate, Bam Trading, and its efforts to prevent the SEC from deposing its CEO and CFO. Stark drew attention to the timing of the CEO’s resignation, which coincided with the emergence of potential whistleblowers. He also emphasized Binance’s protective order against the SEC, arguing that the commission’s discovery requests were deemed “overly broad” and “unduly burdensome.”

Binance vs. SEC Escalates

This latest motion should not be confused with two other significant filings:

• The joint motion filed on September 11, 2023, in which the SEC, Binance Holdings Limited, BAM Trading Services, BAM Management, and CEO Changpeng ‘CZ’ Zhao sought a protective order to limit access to potentially sensitive documents categorized as either “Confidential” or “Highly Confidential – Attorneys’ Eyes Only.”
• The SEC’s motion from August 28, 2023, to file documents under seal, accompanied by 37 supportive submissions, including a declaration from SEC trial attorney Jennifer Farer.

Stark also commented on the unusual nature of BAM Trading and BAM Management’s request to limit the SEC’s depositions to only four BAM employees and to exclude six key witnesses, including BAM’s CEO Brian Shroder and CFO Jasmine Lee. Stark, drawing on his extensive experience in the SEC Enforcement Division, expressed skepticism about such a request, noting that he could not recall a similar situation during his tenure.

Adding to the intrigue, BAM’s President and CEO, Brian Shroder, resigned from the company on the same day Binance’s legal team filed a motion opposing the SEC’s deposition of him. Following Shroder’s departure, Binance US’s chief legal officer, Norman Reed, reportedly assumed the role.

Amidst these developments, Binance US announced significant layoffs, with over 100 positions cut, accounting for one-third of its staff. CEO Changpeng Zhao attributed these layoffs to the SEC’s actions, asserting that the commission’s efforts to “cripple our industry” have tangible consequences on American jobs and innovation.

In light of these events, Stark speculates that the SEC and the US Department of Justice (DOJ) may have opportunities to secure cooperation from Mr. Shroder, especially if he fears criminal prosecution. The recent layoffs at Binance could also potentially lead to whistleblowers, who may be incentivized by the possibility of substantial financial rewards.

The upcoming hearing on September 18 promises to be a pivotal moment in this case, as the court will address key motions that could shape the trajectory of the legal battle between Binance and the SEC.

At press time, BNB traded at $211, just above crucial support.