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September 26, 2023

SEC to Unseal Documents in Legal Case Against Binance US – Here’s the Latest

The U.S. Securities and Exchange Commission (SEC) has requested that the court unseal documents related to its legal case against Binance US. According to court documents from the U.S. District Courthouse in the District of Columbia, the SEC filed a motion on May 6, 2021, to unseal filings from the SEC’s enforcement action against Binance US. The SEC filed a lawsuit against Binance US in October 2020, alleging the company violated certain anti-money laundering (AML) and customer protection rules. The SEC has argued that Binance US failed to maintain a robust AML compliance program, failed to properly verify customer identities, and allowed customers to trade cryptocurrencies without verifying their identity. The SEC also alleged that Binance US actively sought to attract U.S. customers without being registered as a broker-dealer with the SEC. The court granted the SEC’s motion on June 10th and unsealed the filings from the case. The filing reveals that, in February 2020, the SEC contacted Binance US to discuss “potential deficiencies” in its AML and customer protection programs. The filing also reveals that Binance US neither voluntarily responded to the SEC’s contact nor took “timely remedial action in response to the complaint.” The documents further show that Binance US had made efforts to comply with the SEC’s expectations, including conducting a review of its customer base and implementing customer identification and currency transaction reporting requirements. However, the SEC’s complaint alleges that these efforts “were not sufficient to satisfy external and internal due diligence requirements imposed on currency exchanges.” The court has yet to issue a ruling in the case.