Binance.US request for protective order against SEC goes to magistrate judge

A federal judge overseeing the civil case between the United States Securities and Exchange Commission (SEC) and cryptocurrency exchange Binance, Binance.US, and Binance CEO Changpeng Zhao (CZ) has ordered a motion for a protective order to go to a magistrate judge.

In an Aug. 16 filing in U.S. District Court for the District of Columbia, Judge Amy Berman Jackson said she would be referring a motion for a protective order against the SEC filed by lawyers for Binance.US to Magistrate Judge Faruqui for a resolution. Binance.US’ legal team filed the motion on Aug. 14, claiming at the time the order was necessary to protect the firm from the SEC’s “fishing expedition” during discovery.

Prior to Jackson’s ruling, former SEC internet enforcement chief John Reed Stark took to X to speculate the matter would be referred to a magistrate judge ahead of any legal or public pushback from the commission. At the time of publication, the SEC had not filed any motions in response to Binance.US’ request.

“Though every case is different, in most large financial investigations and civil enforcement actions, the SEC’s request for documents, testimony, depositions, interrogatories, etc. typically ask for a bit too much information,” said Stark. “Along the same lines, the defendant typically asks for a bit too much by way of a protective order.”

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The crux of the order was based on the SEC requesting information from Binance.US related to the custody, security and availability of user assets. The firm has claimed the information was not relevant to the SEC’s case, which was filed in June over alleged unregistered securities offerings.

Binance and CZ face a lawsuit from the Commodity Futures Trading Commission, for which they filed motions to dismiss in July. The global exchange is also reportedly under investigation by the U.S. Department of Justice for allegedly allowing Russian entities to use its platform.

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