Binance US failed to produce accounting statements despite extension
As Binance US countered the United States Securities and Exchange Commission’s (SEC) lawsuit, a federal court recently asked the exchange to provide accounting statements. However, citing complexities, they requested an extension, which was granted.
Weeks later, Binance US is yet to submit accounting statements, prompting concerns about compliance.
Accounting complexities
Joe Carlasare, a partner at Amundsen Davis, LLC, and the Co-chair of the Cryptocurrency, Blockchain, and FinTech group, shared a tweet on Aug. 9 displaying a document indicating that BAM Management US Holdings Inc., which is behind Binance US, had a Consent Order to submit a verified written accounting to the Commission within 45 days of the issuance of the Consent Order by the Court.
This would have set a deadline of Aug. 1, 2023.
The shared document shows that BAM did put effort into complying with the Consent Order.
Despite their effort, Binance US could not meet the quality control requirements within the original deadline due to the large volume of information required for verification in written accounting. Nevertheless, the exchange said they are working to complete the task.
Justia Dockets and Filings highlighted a minute order issued by Judge Amy Berman Jackson six days prior.
The order granted defendants BAM Trading Services Inc. and BAM Management US Holdings Inc.’s request for additional time to submit a verified written accounting to the SEC per Section IV of the Consent Order dated Jun. 17, 2023.
The deadline for submitting the accounting was rescheduled to Aug. 7, 2023.
Binance CEO attempted to shut down US operations
Changpeng “CZ” Zhao, Binance’s CEO, attempted to shut down the exchange’s US operations earlier this year. However, the company’s board of directors did not unanimously decide on closing the US branch.
Brian Shroder, CEO of the US operations division, prevented the resolution to close the branch, while CZ continued to advocate for stopping US operations.
CZ’s motivation for this move is linked to the complex regulatory landscape confronting the crypto industry and Binance within the United States.
In hindsight, it raises curiosity about the rationale behind CZ’s push for this supposed closure of US operations. Interestingly, Binance’s international operations adhere to local regulations, as recently demonstrated by their assertion of a license in El Salvador on Aug. 9.
