SEC files private motion in court case against Binance

SEC files classified court motion in the case against cryptocurrency exchange Binance

Former SEC lawyer John Reed Stark called the filing of court documents under seal a rare practice

The U.S. Securities and Exchange Commission (SEC) has filed a closed motion containing 35 exhibits with the court in the case against cryptocurrency exchange Binance, Coindesk reported, citing the document.

Former SEC lawyer John Reed Stark noted that filing court documents under seal of secrecy is a "rare practice." In the last 20 years he worked at the agency, he said, sealed motions under seal did not lend themselves to it.

Stark offered two hypotheses that caused the regulator to choose to file court documents under seal. First, the SEC's evidence may reveal details of the U.S. Justice Department's criminal investigation that the agency wanted to keep secret. The secret document filed may involve non-public allegations of money laundering related to the Binance crypto exchange or other potential criminal activity, the lawyer said. Second, the regulator apparently does not want to jeopardize witnesses or an individual company that is on the witness stand in the case, he added.

"It is in the public interest to know how the agency is using tax money. The SEC wants its messages clearly heard to prevent future securities violations," the lawyer emphasized.

Millions of problems. How the charges against Binance threaten the exchange's users

In June, the SEC filed a lawsuit against Binance and its head Changpeng Zhao for violating securities trading rules. The court document showed that the commission recognized the BNB token, as well as the BUSD stablecoin, which carries the exchange's brand, as securities.

The SEC also demanded the blocking of assets of Binance's U.S. unit. The exchange said the regulator's demand was unreasonable and had nothing to do with concern for user funds, which the SEC cited as the reason for the motion.

In August, the media reported that Changpeng Zhao had previously considered the possibility of completely closing the U.S. division of the exchange (Binance.US). The head of the site allegedly feared possible damage to the company and its customers due to regulatory pressure.