The US Securities and Exchange Commission (SEC) has been suing Binance since the beginning of June because the crypto exchange and its founder Changpeng Zhao (CZ) are allegedly guilty of fraud. Now the SEC has asked the judge whether submitted documents can be sealed.
Judge seals Binance crypto exchange documents
That’s according to a court decision this week. The judge now allows the SEC to file documents in the lawsuit that must remain sealed. In addition, the SEC filed 37 other documents, including documentary evidence, a proposed injunction for something, and a statement from SEC litigator Jennifer Farer.
According to former SEC director John Reed Stark, this indicates that the US Department of Justice is considering prosecuting Binance for criminal activities. At the beginning of August it was said that the ministry would check this anyway. The company has been very reluctant to do so, fearing a bank run that would hit Binance customers hardest. In January, it was announced that prosecutors had been investigating Binance for some time as part of a broader investigation.
Stark thinks it is unlikely that Binance will try to prevent this, as the material submitted could harm the crypto exchange. After all, it seems to be about allegations of criminal practices.
What is the secret SEC filing for Binance?
In the SEC-Binance litigation, the SEC has filed a classified request for permission to file documents under seal, according to an SEC court filed last night. Filing a court document “under seal” allows… pic.twitter.com/cmx6gdh2so
— John Reed Stark (@JohnReedStark) August 29, 2023
Binance in heavy weather
Binance is going through a very difficult time right now. For example, it has fewer and fewer banking partners, has now completely shut down its activities in the Netherlands and has discontinued its crypto debit card. In fact, Binance’s US sister company, Binance.US, has stopped offering non-stablecoin trading pairs entirely.
In any case, the platform is currently running without any problems. Clients also began withdrawing large sums of assets earlier this year. Fortunately, this has not yet resulted in a full-scale bank run.