The ongoing legal clash between crypto exchange giant Binance and the United States Securities and Exchange Commission [SEC] shows no sign of cooling down. In a recent development, CEO, Changpeng Zhao, has made a bold move by petitioning the court to dismiss the SEC’s lawsuit. This legal skirmish also involves Binance Holdings’ U.S. subsidiary, and together, they have presented a joint motion seeking the dismissal of the SEC’s allegations.
An exhaustive 60-page petition filed on September 21 with the United States District Court, centers around Binance’s allegations that the SEC has failed to offer clear regulatory guidelines for the cryptocurrency sector while exceeding its jurisdiction.
One of the core arguments made by both parties is that the SEC has pursued unconventional legal theories, aiming to hold them accountable for crypto asset sales that date as far back as July 2017. This predates any substantial public guidance provided by the SEC regarding cryptocurrencies. In essence, the SEC’s actions are an overreach, and they infringe on established principles of legal clarity and fairness.
Moreover, Binance’s legal representation has not minced words when it comes to the SEC’s perspective on the cryptocurrency industry. They assert that the regulator has fundamentally misunderstood securities laws and their applicability to digital assets. According to the filing, “In attempting to claim regulatory power over the crypto industry, the SEC distorts the text of the securities laws.”
Binance Holdings’ American subsidiary, Binance.US, has also chosen to stand its ground. In a separate 56-page filing on the same day, it sought the dismissal of charges laid against it by the SEC. The SEC’s initial lawsuit, filed on June 5, alleged that the trading firm had violated securities regulations by offering the sale of unregistered securities and operating in an unlawful manner within the United States.
Binance’s High-Stakes Legal Showdown
This is not the first time Binance has found itself in the crosshairs of U.S. regulators. The Commodity Futures Trading Commission [CFTC] had taken legal action against the platform three months prior, accusing the exchange of failing to register with the CFTC and flouting multiple regulatory guidelines.
As the legal battle between the crypto exchange and U.S. regulatory bodies intensifies, it has not gone unnoticed by legal observers. Prominent attorney Jeremy Hogan drew attention to the irony of the situation, highlighting that both the CFTC and SEC had sued Binance within a short span, with contrasting claims about the nature of Binance’s BUSD token – first as a commodity and then as a security.
Hogan humorously noted that if FinCen were to file suit next, alleging BUSD to be a currency, Binance would have achieved the “Holy Trifecta.” In an evolving legal landscape, the outcome of this high-stakes legal showdown will undoubtedly have far-reaching implications for the cryptocurrency industry in the United States and beyond.