Binance US Compliance Concerns Amid SEC Lawsuit

As Binance US responded to the United States Securities and Exchange Commission’s (SEC) lawsuit, a federal court recently requested accounting statements from the exchange.

However, citing complications, they asked for and were granted an extension.

Several weeks later, Binance US has yet to submit accounting statements, causing compliance concerns.

Joe Carlasare, a partner at Amundsen Davis, LLC, and the Co-chair of the firm’s Cryptocurrency, Blockchain, and FinTech practice group, tweeted on August 9 a document indicating that BAM Management US Holdings Inc., the company behind Binance US, had a Consent Order to submit a verified written accounting to the Commission within 45 days of the court’s issuance of the Consent Order.

This would have established an end date of August 1, 2023. The document indicates that BAM did try to comply with the Consent Order.

Despite their efforts, Binance US could not satisfy the quality control requirements by the original deadline due to the volume of information required for written accounting verification.

Nonetheless, the conversation indicated that they were working to complete the mission. Justia Dockets and Filings highlighted a six-day-previous minute order issued by Judge Amy Berman Jackson.

The order granted the defendant’s request for additional time to submit a verified written accounting to the SEC following Section IV of the Consent Order dated June 17, 2023.

The new deadline for submitting the accounting is August 7, 2023.

Changpeng “CZ” Zhao, CEO of Binance, attempted to close down the US operations of the exchange earlier this year.

The company’s board of directors did not reach a unanimous decision regarding the closure of the US branch.

Brian Shroder, chief executive officer of the US operations division, prevented the branch closure resolution while CZ continued to advocate for ending US operations.

The intricate regulatory environment confronting the crypto industry and Binance in the United States prompted CZ to take this action.

In hindsight, it begs the question of why CZ pushed for the alleged termination of its US operations.

Intriguingly, Binance’s international operations comply with local regulations, as evidenced by their August 9 license issuance in El Salvador.