SEC Wants To Use Plea Deal Docs in Binance Lawsuit

The U.S. Securities and Exchange Commission has argued that newly unsealed plea deal documents can and should be used in its case against cryptocurrency exchange Binance and its ex-CEO Changpeng Zhao, according to CryptoSlate.

Binance and Zhao are asking for dismissal of the SEC case. The SEC claims the agreements prove its case should go forward. The regulator wants the defendants’ agreements with agencies including the Financial Crimes Enforcement Network and the Department of Justice brought to the attention of the court.

John Reed Stark, former chief of the SEC’s enforcement division, said the documents are a “treasure trove of fresh and comprehensive Binance-related inculpatory evidence,” according to the article. Stark notes that the SEC doesn’t want the documents entered into evidence. It wants a stipulation that the facts in the plea agreements are true.

The defendants both admitted seeking and serving millions of U.S. customers, with over 23% of its customer base located in the United States and therefore under SEC protection. The defendants claim they didn’t get fair notice that they were violating SEC regulations, but in DOJ plea agreements they admit to willful violation of U.S. law.

The documents show Binance agreeing to a strict monitoring and oversight protocol, which Stark said will be so costly it might bankrupt the company. He called it tantamount installing bodycams on every member of a drug cartel and making the cartel pay for the surveillance.

Stark predicts that the plea deal will collapse, resulting in additional charges against Binance, and anyone “nefariously intertwined with the Binance criminal enterprise.”