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The United States Securities and Exchange Commission (SEC) has endured another huge blow in its ongoing lawsuit against Binance exchange after Presiding Judge Faruqui denied the regulator's request for immediate inspection of the software of the trading platform. According to the feedback from the judge during the hearing that was held on Monday, he noted that he is not "inclined to allow the inspection at this time."
Alex DovbnyaThe SEC needed this inspection badly, as it noted in previously filed motions claiming that the exodus of staff and leaders at Binance.US may affect its plans to properly subpoena the right people at the firm. While Judge Faruqui denied this inspection request, he directed the SEC to be more flexible with its plans to gain materials for discovery by speaking with a broader range of people.
This position of the judge has further complicated the efforts of the SEC to solidify its accusation position as far as Binance exchange is concerned. The regulator previously decried how Binance is not cooperating with its investigation, thereby forcing a drawback in its bid to gather the intel it requires to properly defend its case.
One of many blows
While this current refusal of access for the SEC might not change the outcome of the lawsuit much, it generally underscores the growing trend of request and motion denials the market regulator has been facing for the past year.
Notably, the regulator lost its push to prove that XRP, when traded on open markets to retail investors, constitutes a security in an epic ruling from Judge Analisa Torres back in July.
Since then, the SEC has also lost the case featuring a lawsuit brought by Grayscale Investments after the regulator denied its request to convert its proprietary trust into a full-fledged Bitcoin Exchange Traded Fund (ETF) product.
Tomiwabold Olajide
Dan Burgin
Alex Dovbnya
Vladislav Sopov