- Court approves info disclosure order in SEC vs. Binance lawsuit.
- The protective order allows confidentiality for trade secrets and customer info in discovery.
- Binance challenges the SEC’s broad demands, protecting proprietary data.
A significant development has taken place in the ongoing legal battle between the US Securities and Exchange Commission (SEC) and Binance entities, including CEO Changpeng Zhao.
The US court has approved a protective order governing the production, use, and disclosure of information and materials related to the SEC vs. Binance lawsuit.
Protecting confidential information
The approved protective order establishes guidelines for the treatment and disclosure of confidential information generated during the lawsuit.
Parties involved are permitted to designate discovery material as confidential, provided it falls within specific categories defined by the court. These categories include nonpublic trade secrets, proprietary financial information, details about the ownership or control of non-public companies, and non-public customer information, such as customer identities.
The order emphasizes that the confidentiality designation won’t apply universally but only to discovery material that precisely aligns with the court’s stipulations. This move seeks to strike a balance between the transparency required in legal proceedings and the protection of sensitive information.
Binance’s defence against SEC’s “fishing expedition”
Binance.US, amidst the legal proceedings, in August 2023 sought a protective order against the SEC, alleging an unwarranted “fishing expedition.” Binance argued that the SEC’s extensive discovery demands were overly broad and unreasonable. The regulatory body’s requests, Binance claimed, aimed at acquiring every document related to customer assets, posing a potential threat to the company’s proprietary information.
Binance expressed concern over the perceived unlimited authority granted to the SEC, enabling an investigation into all aspects of Binance.US’s asset custody practices without apparent limitations. This legal manoeuvre underscores the importance of establishing clear boundaries in regulatory investigations, preventing overreach and safeguarding the interests of the entities under scrutiny.
As the lawsuit unfolds, the protective order stands as a crucial mechanism ensuring a fair and controlled exchange of information. It reflects the court’s commitment to preserving the confidentiality of sensitive materials while facilitating a thorough examination of the issues at hand in the SEC’s case against Binance entities and CEO Changpeng Zhao.