July 21, 2024
The SEC seeks court authorization
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SEC Requests Court Approval for Sealed Documents in Binance Civil Case

The legal representatives of the United States Securities and Exchange Commission (SEC) involved in the civil case against Binance have formally requested that the court approve their motion to allow confidential documents to be filed and kept under seal.

On August 28th, in a submission to the U.S. District Court for the District of Columbia, the SEC appealed to a federal judge for permission to file certain documents in a concealed manner within the commission’s legal action against Binance, Binance.US, and Binance’s CEO Changpeng CZ Zhao (CZ). The motion itself was kept confidential, leading to speculation that the SEC intended to include sensitive information in the filings.

Noted former SEC official John Reed Stark commented that the request to file sealed documents could potentially indicate an ongoing criminal investigation by the U.S. Department of Justice. This government agency is believed to be looking into allegations of money laundering and possible breaches of sanctions involving Russian entities in connection with Binance.

Stark mentioned, “The secret U.S. SEC filing likely relates to an existing U.S. DOJ investigation of Binance and could, directly or indirectly, describe the heretofore unknown contents of an impending U.S. DOJ Binance-related indictment or an indictment already filed under seal—which the U.S. DOJ would prefer to keep secret”. He further explained that “Binance will likely not oppose the U.S. SEC sealing motion for fear of making public potentially inculpatory evidence or potentially scathing criminal allegations relating to Binance’s activities.” The motion came after Binance’s peer-to-peer platform prohibited Russian residents from using fiat currencies other than the ruble and eliminated several sanctioned Russian financial institutions from the list of available payment choices. A representative from Binance reportedly noted that the company was examining various options with regard to its operations in Russia, which even included a complete withdrawal from the market.

The SEC had previously initiated a legal lawsuit against Binance, Binance.US, and CZ in June. The allegation was that they had unlawfully provided unregistered securities to users in the U.S. and had failed to register as a broker-dealer clearing agency or an exchange. The Commodity Futures Trading Commission also filed a legal suit against Binance and CZ, and both of them filed requests for dismissal in July. As of the time of this article’s publication, both legal cases were still ongoing.

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