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Binance has submitted a ‘protective order’ against the U.S. Securities and Exchange Commission (SEC). While predicting the exact outcome is challenging, it’s likely that a compromise will be reached, with Binance complying with most of the SEC’s demands, according to ex-SEC official John Reed Stark. The SEC has filed a lawsuit against Binance, citing 13 charges that have allegations of inflating trading volumes and diverting customer funds.
According to Stark, one of Binance’s primary contentions is that it has already shown enough evidence to assure the SEC of the security of its customers’ assets. However, the SEC is stubborn in making what Binance describes as overly broad and burdensome discovery requests.
Stark wrote on Twitter, “Among a slew of accusations, Binance claims it has produced plenty of evidence to assure the SEC that its customer assets are safe and secure, but the SEC nonetheless continues to serve “stunningly overbroad and unduly burdensome” discovery requests on the defendants.”
Binance has expressed its frustration, decrying the SEC’s actions as an “inappropriate fishing expedition” unrelated to the actual merits of the case. The court overseeing this clash, headed by D.C. District Court Judge Amy Berman Jackson, operates under a unique paradigm marked by a Consent Order, which includes provisions for “expedited discovery.”
What Will Likely Happen Regarding Binance’s Recent Motion for a Protective Order In The SEC/Binance Case
There’s clearly a discovery storm brewing between the SEC and Binance. Among other gripes, the U.S. arm of crypto exchange Binance Holdings is fighting an attempt by the U.S.… pic.twitter.com/LzTjsMeMWp
According to Stark, Judge Jackson will punt the case to an experienced and trusted D.C. magistrate judge and may also set a few deadlines and hearing dates to stay on course.
He added, “Judge Jackson will order Binance to give the SEC most of what the SEC requests, but will eliminate some of the more duplicative or obviously overly burdensome/broad requests. Along the way, Binance may achieve a few minor wins, which Binance will undoubtedly tout as colossal victories.”
However, the ongoing saga could take an unforeseen twist with the potential unsealing of a U.S. Department of Justice (DOJ) indictment related to Binance. This move could introduce chaos into the civil proceedings between Binance and the SEC.