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The U.S. Securities and Exchange Commission (SEC) and Binance, one of the world’s leading cryptocurrency exchanges in trading volume, have agreed to file confidential information under court seal. The news broke late yesterday as a joint motion was submitted by all parties involved.

The SEC, along with Binance Holdings Limited, BAM Trading Services Inc, BAM Management US Holdings Inc, and CEO Changpeng ‘CZ’ Zhao, filed a protective order to restrict access to potentially sensitive documents. As per the joint filing, these materials are categorized under two tiers: “CONFIDENTIAL” or “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY.”

The protective order comes on the heels of a contentious legal struggle that has been unfolding since June 2023 when the SEC levied 13 charges against Binance and its CEO Changpeng Zhao, including allegations of unregistered securities sales.

A Mysterious Trail of Funds

This isn’t the first time Binance has found itself embroiled in a controversy involving significant financial transactions. Earlier this year, Reuters reported that Binance had transferred around $400 million from its U.S.-based Silvergate Bank account to a trading firm called Merit Peak. Intriguingly, Merit Peak was registered under BAM Trading and has so far remained shrouded in mystery with no listed headquarters, website, or any apparent connection to CZ.

Regulatory Crackdowns: The New Norm?

The recent legal battle between Binance and the SEC echoes a larger trend of intensified scrutiny on cryptocurrency service providers in the United States. Several other companies, like Coinbase and Kraken, have also faced lawsuits and investigations from federal regulators. Notably, Kraken agreed to pay a $30 million settlement fine following a probe by the SEC into its staking products.

Yet, the regulatory commission is not without its critics. SEC Commissioner Hester Peirce, affectionately referred to as ‘Crypto Mom,’ emphasized the importance of avoiding overregulation by regulatory bodies and acknowledged the diverse applications of crypto beyond just financial transactions.

The big question here is – what is Binance hiding within these sealed documents that require this level of legal confidentiality? The battle has begun and the stage is set for a legal showdown!