Court Issues Protective Order Governing Disclosure of Material in SEC-Binance Lawsuit

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Jai Pratap

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Jai Pratap

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Jai serves as the Asia Desk Editor for Cryptonews.com, where he leads a diverse team of international reporters. Jai has over five years of experience covering the web3 industry.

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November 14, 2023 01:52 EST

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US Court has approved a protective order that will govern the production, use, and disclosure of all information and materials produced by any party in the ongoing SEC’s lawsuit against Binance entities and CEO Changpeng Zhao.

Earlier, the US SEC and Binance had jointly moved for the entry a protective order to govern the treatment and disclosure of certain confidential information produced in the ongoing lawsuit.

Court Issues Protective Order to Govern Material Disclosure

As per the court order, any party may designate discovery material as confidential that the party reasonably believes is confidential information because it falls into at least one of the categories described by the court.

Some of those categories include:

• Nonpublic trade secret, proprietary information, and financial information, including profitability reports or estimates, percentage fees, design fees, royalty rates, minimum guarantee payments, sales reports, and sales margins.
• Non public material relating to ownership or control of any non-public company and non public customer information including the identities of customers.

However, the order further noted that parties recognize that designations of confidential shall not apply to all documents and information produced in discovery, and the designation will be applied to only Discovery Material that specifically qualifies as set by the court’s order.

Binance Looked to Protect Itself From SEC’s “Fishing Expedition”

Earlier, Binance.US sought a protective order against the SEC, alleging that the regulatory body engaged in an unwarranted “fishing expedition” through its extensive discovery demands. The crypto exchange giant claimed that the SEC’s discovery requests were excessively broad and unreasonable.

Specifically, the requests aimed to obtain “every single document in [Binance’s] possession related to customer assets.”

At the time Binance said that the SEC’s interpretation of the Consent Order appeared to grant it unrestricted authority to investigate all facets of Binance.US’s asset custody practices without any apparent limitations.

The initial June order had originally permitted the exploration of Binance’s asset custody, security protocols, and the availability of customer assets.