SEC's Secret Binance Court Filing Has Observers Bracing for Bad News

A new secret court filing related to Binance, the crypto exchange that already faces U.S. accusations of wrongdoing, has some wondering whether more bad news is about to hit the industry giant.

On Monday, in the court docket for its case against Binance, the Securities and Exchange Commission submitted a sealed motion, which lets it file sensitive or confidential information without revealing the contents publicly.

The motion included more than 35 exhibits, a declaration from Jennifer Farer (an SEC trial attorney) and a proposed order.

A spokesperson for Binance did not immediately respond to a request for comment by CoinDesk.

Filing court documents under seal is a “rare move,” John Reed Stark, a former SEC official who now runs a consulting firm, posted on X (formerly Twitter). “After all, it’s in the public interest to know and understand the SEC’s use of U.S. tax dollars and the U.S. SEC wants its messages heard loud and clear to deter future securities violations.”

Stark offered two theories about what the SEC is doing: It’s trying to avoid interfering with a criminal investigation at the U.S. Department of Justice, or the SEC is worried about putting a witness or company at risk.

The SEC in June sued Binance on allegations of violating federal securities laws by offering unregistered securities to the general public in the form of its BNB token and Binance USD (BUSD) stablecoin.

“Under any circumstance, that this SEC seal-seeking filing is unusual, odd and uncommon cannot be overstated,” Stark wrote. “In my almost 20 years in the SEC Enforcement Division, including 11 years as Chief of the SEC’s Office of Internet Enforcement, our team worked on and led a broad range of SEC investigations which involved parallel U.S. DOJ investigations and lots of litigation – and I can’t recall ever seeking to file a motion or any other court document under seal.”