The U.S. Securities and Exchange Commission (SEC) has stepped up its legal scrutiny against Binance US.
In a recent court filing, the regulatory body requested permission to conduct an immediate inspection of the cryptocurrency exchange and to compel Binance to produce relevant documents and communications.
This development is a part of an ongoing lawsuit initiated against Binance in June earlier this year.
The SEC’s primary issue with Binance, including its parent entity Binance Holdings and founder Changpeng “CZ” Zhao, is the allegation that they are operating an unlicensed securities exchange.
Furthermore, the SEC suspects that Binance might be illicitly moving U.S. customer funds offshore through a rebranded entity known as Ceffu.
If proven, this activity would be a violation of prior agreements between the SEC and Binance.
Last week, news surfaced that Binance US CEO Brian Shroder had departed from the company.
This event coincided with a reported 30% layoff within the firm. Shortly thereafter, additional reports confirmed the resignations of Binance US’s chief risk officer and head of legal.
This exodus of top management indicates significant internal and external pressures plaguing the company.
The SEC has emphasized the need for swift action, citing insufficient responses from Binance to its requests thus far.
Describing the exchange’s rebuttals as “half-hearted claims of irrelevance, prejudice, and burden,” the SEC is now awaiting court approval to proceed with its planned inspection and other enforcement activities.
Although the court has yet to provide a specific timeline for these actions, the sense of urgency from the SEC is palpable.
As the legal framework surrounding cryptocurrency continues to evolve, this intensified action by the SEC signals a significant moment in the push for greater regulatory oversight within the industry.
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