Unsealed Filings Expose Binance.US Auditor’s Struggle To Verify Full Collateralization | Bitcoinist.com


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.

How To Get Free Crypto  

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for the security and stability of the platform, as it guarantees that customers’ funds can be readily accessed and withdrawn when needed.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. 

Coinbase Banner  

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 information (ESI) and documents not stored on active systems but on backup tapes or other media no longer in their possession, custody, or control. 

They claim that such ESI is not reasonably accessible and would impose significant search, preserve, and access costs. BAM asserts that they are not obligated to search such sources in response to the requests.

FreeBitcoin Banner  

In addition, Binance.US asserts the protection of various privileges, including the attorney-client privilege, work-product doctrine, joint-defense or common-interest privilege, and applicable domestic or foreign laws. 

They maintain that the requests seek information or documents covered by these privileges or other protections, and their response should not be construed as a waiver of those privileges.

The company also contests requests seeking the production of trade secrets or information that is confidential, proprietary, commercially sensitive, or competitively significant to them or any affiliates. They argue that the disclosure of such information could have adverse effects on their business operations.

It is important to note that BAM’s responses and objections to the specific requests have not been detailed in the unsealed court filings. However, the filings emphasize that BAM intends to withhold responsive materials based on its objections to each request, except where indicated otherwise. 

Despite their objections, BAM expresses a willingness to engage in discussions with the plaintiff regarding the requests.

These disclosures raise important questions regarding the scope of document production, the burden imposed on the defendants, and the applicability of various privileges and protections. As the litigation progresses, further developments are expected to provide more insights into the case.

BNB’s losing all the gains of the 24-hour time frame on the daily chart. Source: BNBUSDT on TradingView.com

Featured image from iStock, chart from TradingView.com 

Go to Source
Author: Ronaldo Marquez

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.