This is related to the lawsuit that the securities regulator has filed against the leading crypto exchange in the world.
Back in June, a consent order was agreed between the SEC and the American subsidiary of the Binance crypto exchange, which operates under the names BAM Management US Holdings and BAM Trading Services.
This was because the agency had tried to freeze all of the crypto exchange’s assets due to concerns about the digital assets of customers that were held by the company.
Some observers had defined the consent order as ‘burdensome’ right away and it had permitted the securities regulator to do a ‘limited expedited discovery’ pertaining to the availability and custody of customer assets.
However, in the filing that was submitted late on Monday, the company said that the SEC’s discovery requests were beyond what had been agreed in the consent order.
Binance said that the requests were inappropriate enough to be categorized as a ‘fishing expedition’ by the regulatory body.
According to the filing, in the last 45 days, the discovery requests that the SEC has made have been unreasonable and overboard.
It said that the regulator had demanded that Binance US share every document it has related to its customers’ assets.
The company asserted that the SEC believes the consent order gives it the authority to investigate all of their custody practices without any limits.
The US subsidiary of Binance said that the SEC had gone as far as demanding that the company executives give deposition testimony and communication on a number of topics unrelated to customer assets.
The filing said that the executives included the CFO and CEO, who do not have a lot of knowledge about the custody issues that are the focus of the case.
Binance said in the request that it had tried to respond to the requests of the SEC in good faith and had shared hundreds of documents, along with depositions from employees familiar with asset security.
In fact, it added that it had also taken steps to ensure that the assets are in the custody of the US. But, it said that the demands had gotten unreasonable.
It indicated that the agency was abusing the provision of discovery that had been mentioned in the consent order.
The main argument that the company has presented in its protective order request is that even though the SEC has been investigating the exchange for years, it has not been able to produce any evidence of customer assets being mishandled.
Binance also asserted that it would be disruptive, burdensome and unproductive to depose leading executives like the CFO and the CEO.
It suggested that the SEC should first focus on deposing employees who have an in-depth knowledge of asset custody.
The approach of the SEC has been called inappropriate and ‘overboard’ by the crypto exchange.