SEC Suffers Blow in Lawsuit Against Binance.US After Judge Denied Request To Probe Exchange’s Software: Report

A US federal magistrate judge is reportedly choosing not to grant the U.S. Securities and Exchange Commission (SEC) permission to inspect the technological infrastructure of Binance’s American affiliate, a setback for the regulator. 

A new report from Bloomberg indicates the SEC asked Magistrate Judge Zia M. Faruqui on Monday for permission to search through Binance.US’s software, but Faruqui shot down the idea, saying he was not inclined to permit the inspection “at this time.” The judge told the regulator to come back with more specific requests, according to Bloomberg. 

The SEC reportedly wanted to inspect the software to potentially establish more links between Binance.US and Binance’s global firm, which is the largest exchange by trading volume in the world. The SEC first sued Binance, the exchange’s CEO Changpeng Zhao and Binance.US in June, alleging that the firms were violating securities laws. 

Just a day later, the regulatory agency also filed a lawsuit against Coinbase, the top crypto exchange in the US, for similar reasons. Later that month, Senators Elizabeth Warren of Massachusetts and Chris Van Hollen of Maryland accused Binance of lying to Congress after lawmakers questioned company officials about its business practices. 

The senators asked the U.S. Department of Justice (DOJ) to investigate the exchange. Binance.US halted US dollar deposits and withdrawals a few days after the SEC charges were announced. 

Source : The Daily Hodl / September 20, 2023