In a recent development, the United States Securities and Exchange Commission (SEC) unsealed court filings related to the ongoing litigation against Binance.US and BAM Management US Holdings Inc. 

The filings provide insights into the defendants’ responses and objections to the plaintiff’s first requests to produce documents and inspection.

Doubts About Binance.US Full Collateralization

The court filings reveal that the SEC has expressed reservations about Binance.US’s ability to ensure full collateralization of customer assets at certain critical junctures. 

This finding was based on an audit conducted by Binance.US’s auditor, who reportedly encountered significant challenges verifying the platform’s complete collateralization. The SEC’s concerns highlight potential risks to investors and the need for increased transparency and regulatory oversight in the cryptocurrency industry.

Collateralization is a crucial aspect of cryptocurrency trading platforms, ensuring that reserves adequately back customer assets. Maintaining full collateralization is essential for the security and stability of the platform, as it guarantees that customers’ funds can be readily accessed and withdrawn when needed. 

Any shortcomings in collateralization practices could expose users to potential losses and undermine market confidence.

The unsealed court filings also reveal that the SEC has requested extensive documentation and inspection of Binance.US’s internal processes and records. 

However, Binance.US has raised objections to several aspects of the SEC’s requests. The platform has argued that certain demands are “overly broad, unduly burdensome, or duplicative” of previous discovery requests and subpoenas in the ongoing litigation. 

Furthermore, BAM’s (Binance.US parent company) legal counsel has expressed readiness to discuss with the plaintiff to resolve any disputes concerning the requests’ meaning, scope, relevance, or BAM’s responses and objections.

Objections Raised

BAM raises objections regarding preserving and producing electronically stored informatio

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Author: Ronaldo Marquez

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