During a hearing on September 18, a US judge, Judge Farooqui, declined the SEC's request for immediate access to Binance. US's software, stating that he "does not intend to allow inspections at this time." The hearing centered on the SEC's motion seeking detailed information from Binance and easier access to depose its executives, a contentious issue between the regulator and the exchange in recent weeks.
The SEC has charged Binance's US arm, Binance.US, and its global affiliate Binance Holdings Ltd., including CEO Changpeng "CZ" Zhao, with selling unregistered securities on June 5. The regulator has been striving to obtain information from Binance.US. However, the SEC claimed on September 15 that Binance.US was uncooperative during the investigation, producing only 220 documents, many of which were incomprehensible screenshots or documents lacking dates or signatures. The regulator also accused Binance of failing to provide the required witness statements, agreeing to only four witnesses it deemed suitable.
Binance countered the SEC's repeated disclosure demands as "unduly onerous." Despite Binance agreeing to a disclosure order in the SEC's case involving its unregistered securities activities and other charges, the exchange was characterized as uncooperative by the SEC. Judge Farooqui's decision to deny immediate access to Binance.US's software and other documents represent a partial setback for the SEC in its ongoing lawsuit against the exchange.
One of the SEC's primary concerns regarding Binance is the custody of customer assets held by Binance.US. The regulator contends that a more thorough investigation of Binance.US is necessary to uncover potential links to the exchange's global affiliates.
