SEC Files Sealed Motion on Binance Crypto Exchange Case

BySamson Ononeme

Aug 30, 2023
As storm blankets Washington, Binance gets one-day reprieve from lawsuit brought by SEC last year accusing exchange of illegal token trades.

Key Insights

  • The US SEC filed a sealed motion in the case against Binance with 35 exhibits.
  • The former SEC official noted that in his 20 years of work, he does not remember such cases.
  • He suggested that the classified document could contain non-public allegations of money laundering or other activities.

The U.S. Securities and Exchange Commission (SEC) has filed a closed motion with the court in a case against the Binance crypto exchange, Coindesk writes, citing the document. This petition contains more than 35 exhibits, the newspaper notes.

Speculations on why the SEC chose to file a secret motion

Filing court documents classified as “secret” is a “rare move,” former SEC official John Reed Stark noted in X (formerly Twitter). He said that he did not remember such cases in almost 20 years of his work in the regulator. It’s in the public interest to know and understand how the SEC uses tax money, and the regulator wants its messages to be heard “loud and clear” to prevent future violations, Stark said.

Stark suggested that the SEC was trying to avoid interfering in the investigation against Binance or did not want to put a witness or the company at risk.

The secret motion could contain non-public allegations of money laundering related to the crypto exchange or other potentially criminal activities, Stark believes. In his opinion, Binance will not oppose the dismissal of the petition, fearing the publication of “potentially incriminating evidence or potentially harsh criminal charges.”

Recap of SEC’s lawsuit against Binance and founder

The SEC filed a lawsuit against Binance and founder Changpeng Zhao in federal court in June. The commission accused them of violating US securities rules on 13 counts. The SEC believes that Binance and Zhao engaged in “an extensive web of deceit, conflicts of interest, non-disclosure, and willful evasion of the law.”

According to the agency, Binance secretly allowed large US clients to trade on the platform, although it publicly announced a ban on transactions for US users. In addition, Zhao secretly controlled the operations of Binance.US, which was billed as an independent platform for US investors, the SEC noted.

Following the filing of the lawsuit, Binance suspended accepting deposits in dollars. In mid-June, the crypto exchange and the SEC reached an agreement that will allow the platform to avoid a complete freeze of assets while the lawsuit is being considered.

Read also: Binance Files Petition Against SEC

Under the terms, Binance Holdings, its US subsidiary BAM Trading Services, BAM Management US, and Zhao will repatriate the assets of US Binance.US clients, while US clients will be able to freely withdraw funds from the platform. In August, it became known that Zhao was considering closing Binance.US in order to protect the crypto exchange from regulatory pressure.

Samson Ononeme

Meet Samson Ononeme, a dynamic writer, editor, and CEO of With a passion for words and a sharp business acumen, Samson captivates readers with captivating storytelling and delivers insightful market analysis. He is a trailblazer in the finance industry, empowering individuals with knowledge and shaping the narrative of money. Get ready to be inspired by his literary prowess and entrepreneurial leadership.

2 thoughts on “SEC Files Sealed Motion on Binance Crypto Exchange Case”

Leave a Reply