Binance said the SEC’s requests are “unduly burdensome” soon after the parties agreed on a joint motion to file confidential information under seal.
Binance.US has responded to the motion to compel and reply by the United States Securities and
Exchange Commission, calling most of the SEC’s requests “unreasonable” and “unduly burdensome.”
On Sept. 12, attorneys for BAM Trading Services, which operates the Binance.US cryptocurrency
exchange, filed sealed documents in opposition to the U.S. SEC seeking additional details from Binance.US.
The defendants argued that the SEC’s requests for production and interrogatories are “overly broad,
unduly burdensome” and “beyond the scope of the consent order.” BAM attorneys claimed that the
SEC’s demand for certainty, as well as the requests for depositions of BAM CEO Brian Shroder and
chief financial officer Jasmine Lee, were “unreasonable.”
BAM attorneys stated that the SEC’s motion “does not identify any evidence” that Shroder and Lee are
involved in the day-to-day management details concerning the custody and transfer of customer assets at Binance.US.
“BAM’s CEO and CFO have no unique knowledge regarding facts relevant to the limited topics identified
in the consent order’s expedited discovery provision,” the lawyers said. The attorneys also said that BAM
has offered many other witnesses, which had more insights about BAM’s operations, including BAM’s
chief information security officer Erik Kellogg. The lawyers noted:
“The burden imposed by these depositions far outweighs their potential benefit, and the discovery
sought is disproportionate to the needs contemplated by the consent order.”
The attorneys also argued that the SEC still has “no evidence to support its unsubstantiated allegations”
implying that customer assets have been somehow diverted. According to the defendants, the SEC’s
allegations that form its cross-motion to compel are “misleading and mistaken.”
There is also a “complete disconnect” between the SEC’s “overbroad and abusive approach” and the
limited expedited discovery to which the regulator agreed in the consent order, the lawyers said.
BAM’s response came shortly after the SEC and Binance agreed on a protective motion,
which requires parties to file confidential information under seal. The plaintiff and the defendants
submitted the joint motion on Sept. 11, pledging to file confidential and non-public information as
protected materials, restricting access to parties like the judge, attorneys, plaintiffs and defendants.
