Why has a Sealed Motion been Filed Against Binance? Former SEC Chief Shares His View

While the crypto community last night focused on Greyscale’s victory over the SEC, the U.S. regulatory agency quietly filed a sealed motion relating to Binance, the global cryptocurrency exchange.

The motion, which seeks permission to file documents under seal, has ignited speculation about the nature of the ongoing legal tussle between Binance and the SEC.

Former Chief of SEC Internet Enforcement, John Reed Stark, took to Twitter to discuss the rare move by the SEC and what it could imply for the world’s most popular cryptocurrency exchange. Stark provided valuable insights into potential reasons behind the sealed motion, offering a glimpse into the possible scenarios at play.

Typically, SEC motions and enforcement actions are filed openly, enabling public scrutiny and understanding of the agency’s utilization of resources. However, in certain instances, the SEC may choose to file documents under seal to protect sensitive or confidential information from becoming part of the public record.

Stark highlighted two primary reasons for the SEC’s decision to file under seal in the Binance case:

1) Protecting Ongoing Criminal Investigations: Stark suggested that the SEC might be avoiding actions that could interfere with or reveal secret details about a parallel criminal investigation being conducted by the U.S. Department of Justice (DOJ). If the DOJ is investigating Binance for potential criminal conduct such as money laundering, the SEC might be collaborating to avoid disrupting DOJ’s activities.

2) Safeguarding Witnesses or Companies: Another potential reason could be to prevent harm to a witness or the company itself. However, Stark said that this more often involves redactions rather than sealing of the documents.

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Stark speculated that the sealed motion filed by the SEC could be linked to nonpublic allegations of money laundering or other criminal conduct involving Binance. He opined that the comprehensive nature of the motion suggests it might pertain to nonpublic Binance-related money laundering allegations or other potential criminal conduct. Such a move could indicate that the motion touches upon the contents of an impending U.S. DOJ Binance-related indictment, which the DOJ intends to keep secret.

Furthermore, Stark postulated that Binance might not oppose the sealing motion out of fear that doing so could expose potentially incriminating evidence or criminal allegations against the exchange.

Disclaimer: This article is based on speculation and opinion and does not constitute legal advice or confirmation of any specific events or actions.