• The US SEC has filed a sealed motion against Binance Exchange.
  • The move allows the regulator to file sensitive or confidential information with a court and for it to be kept off any public record.
  • Experts speculate the SEC filing likely relates to an existing US DOJ investigation of Binance.

The US Securities and Exchange Commission (SEC) has resorted to a rare tactic, filing a secret motion against Binance. It comes as the financial regulator continues in its clampdown against crypto exchanges, with Binance and its CEO Changpeng Zhao (CZ) falling victim to charges of securities laws violations, asset commingling, and diverting billions of Dollars of customer funds to a third-party entity owned by CZ.

Also Read:  Binance Coin price crashes by 10% as SEC sues Binance and CEO Changpeng Zhao.

SEC files sealed motion against Binance

The US SEC has filed a sealed (secret) motion for leave, a rare tactic often used in court when either the prosecution or defendants want to keep documents under seal. The court allows such a move to protect the integrity of sensitive or confidential information so that it is not in the public record while it is filed.

Part of the sealed submissions include "exhibits, a proposed order and a declaration of SEC trial attorney Jennifer Farer," according to Former Chief SEC Office of Internet Enforcement, John Reed Stark.

Filing a sealed motion is common for criminal enforcement agencies, but considering the SEC is a civil authority, the move is rather rare. Civil motions are often filed openly, with the public having easy and open access because civil matters ideally border along public interest, which is why the public is allowed participation.

On other matters, the SEC has made it open whenever it files motions against players in the crypto sphere, with intentions for resounding regulations so that industry players will not violate them in the future. Making it public could jeopardize ongoing criminal investigations or prosecutions led by the US Department of Justice (DOJ).

Notably, the DOJ has been considering pursuing fraud charges but opted to use other means out of fear of implications to customers, like what happened with the FTX exchange.  

As such, the alternative could mean convening a grand jury, which is usually secretive per the law. An excerpt from the DOJ's manuscript on the matter reads:

To guarantee the secrecy of grand jury hearings, Federal Rule of Criminal Procedure 6(e) prohibits most persons present during the proceedings from disclosing what transpired inside the grand jury room; however, the proscription does not apply to witnesses.

Also, the DOJ could have found turncoats or whistleblowers against Binance – hence the use of tactics that would not compromise the case it is building.

Experts speculate that the SEC's effort to avoid compromising the integrity of the DOJ's case could be a prelude to an impending indictment against Binance. On this theory, Stark thinks:

Binance will likely NOT oppose the US SEC sealing motion for fear of making public potentially inculpatory evidence or potentially scathing criminal allegations relating to Binance's activities.

What it could mean if Binance responds

Binance opposing the request to keep the motion sealed would increase the likelihood the SEC’s decision is rooted in a desire to protect witness identity, which, according to Stark, the exchange would rather have exposed.

…and Binance would prefer that the world know the names of any of Binance's accusers.

Regardless, Stark maintains that this is the first time he has encountered a sealed motion across his longstanding history with the commission.

As Binance continues to navigate regulatory pressure, users continue to bear the brunt. Recently, its users in Belgium were compelled to shift to the Poland exchange due to regulatory constraints. The exchange has also filed court orders seeking protection against the SEC, citing unduly burdensome requests.

With jurisdictions strangling its operations, Binance is casting its eyes on friendlier grounds, with Japan featuring among the choice options. 

Cryptocurrency prices FAQs

How do new token launches or listings affect cryptocurrency prices?

Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.

How do hacks affect cryptocurrency prices?

A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.

How do macroeconomic releases and events affect cryptocurrency prices?

Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.

How do major crypto upgrades like halvings, hard forks affect cryptocurrency prices?

Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Arbitrum community opens vote for 200 million ARB Gaming Catalyst Plan proposal

Arbitrum community opens vote for 200 million ARB Gaming Catalyst Plan proposal

Arbitrum community opened a vote for its Gaming Catalyst Program (GCP) to boost support for game builders in the ARB ecosystem. The plan is to strategically allocate 200 million ARB to game projects within Arbitrum. The token has sustained its gains from the week.

More Arbitrum News

ONDO extends gains by 4% with rise in non-empty wallets, hits new all-time high

ONDO extends gains by 4% with rise in non-empty wallets, hits new all-time high

Ondo extended gains by 75% increase in the past 11 days, per crypto intelligence tracker Santiment. The token ranks among top trending assets on the platform, with a massive spike in non-empty wallets. ONDO added 4% value to its price on Sunday, sustaining 40% gains from the week. 

More Ondo News

Aptos user transactions hit record high, APT eyes over 20% gains

Aptos user transactions hit record high, APT eyes over 20% gains

Aptos user transactions in a single day reached 97.488 million. The number of user transactions and Transactions Per Second, both metrics hit a record high, supporting the thesis for price gains in APT. The rise in transaction-related metrics can be attributed to Tapos, a viral clicker game where users can earn rewards. 

More Aptos News

US Presidential candidate Donald Trump is open minded to cryptocurrency, supports right to self custody

US Presidential candidate Donald Trump is open minded to cryptocurrency, supports right to self custody

US Presidential candidate Donald Trump shared positive views on crypto, posting on social media platform, “I am very positive and open minded to cryptocurrency companies and all things related to this new and burgeoning industry.” 

More Cryptocurrencies News

Bitcoin: BTC struggles, but $80K is at striking distance Premium

Bitcoin: BTC struggles, but $80K is at striking distance

Bitcoin (BTC) price is in a good position to resume the bull rally despite the recent struggle. Optimism will restart if BTC overcomes a critical hurdle and flips it into a foothold. In such a case, the pioneer crypto will be slated to push to a new all-time high (ATH). 

Read full analysis