SEC’s Bid for Binance.US Software Access Denied by Judge: A set-back for the Crypto Regulator

Background of the Hearing

On September 18, the U.S. Securities and Exchange Commission (SEC) faced yet another hurdle in their ongoing battle with Binance.US. During a hearing, Judge Faruqui made it clear that he was not inclined to grant the SEC immediate access to the exchange’s software, leaving the regulator scrambling for alternative strategies.

The Tension Between the SEC and Binance.US

This latest development highlights a growing tension between the SEC and Binance.US. The SEC has been accusing the crypto giant of failing to cooperate since it launched its lawsuit against Binance’s American arm on June 5, targeting them for alleged sales of unregistered securities. It seems that trying to wrangle information from the blockchain might be a bit more complicated than expected.

Judge Faruqui’s Perspective

During the session, Judge Faruqui suggested that instead of blanket demands for software access, the SEC should refine their requests and engage with a broader array of witnesses. This could be his polite way of saying, “Try harder!” The judge’s remarks indicate he expects a more targeted approach in the SEC’s inquiry, which might mean more paperwork and fewer exciting courtroom theatrics.

SEC’s Struggles With Document Retrieval

The SEC’s frustrations with Binance.US didn’t go unnoticed, as they pointed out that only 220 documents had been provided. However, the quality of these documents left them wanting, with many consisting of “unintelligible screenshots” and lacking crucial details like dates or signatures. Essentially, it’s like asking for a full report and receiving a PowerPoint presentation with no slides. Talk about a paper trail gone wrong!

What Lies Ahead for the SEC?

The denial of immediate access to Binance.US’s software is a partial setback for the SEC, who is eager to dig deeper into operations, especially regarding customer asset custody. They are also wary of potential connections to Binance’s global operations, which opens a can of worms that could take much longer to untangle. The question lingers: what will the SEC do next? Their only option seems to be a game of catch-up, reinventing their strategy and hoping for better cooperation from the crypto conglomerate.