Binance has requested that the court should dismiss the legal claims from the US SEC over its securities violations.
The legal team of Binance and its former CEO Changpeng “CZ” Zhao, has filed a fresh motion before a US Court in the District of Columbia. In a joint motion, the lawyers seek to dismiss the amended complaints against Binance and CZ, as defendants. The Securities and Exchange Commission (SEC) had filed an amended complaint suit against them prior to this kickback.
Binance Legal Team Attacks SEC’s Inconsistency
In their filing, Binance and CZ’s legal team argue that the fresh amended complaint by the regulatory authority contradicts an earlier court ruling. According to them, since a US court ruled that crypto assets are not securities, the SEC should adhere to that judgment and its implications. That is the resale of assets long after they were first distributed by their developers does not imply “securities” transactions.
The lawyers attacked the SEC’s Amended complaint which continues to insist that all transactions involving crypto assets are securities transactions. Notably, the SEC in its filing maintains that crypto transactions including secondary market resale of tokens are securities.
Notably, Judge Amy Berman Jackson in her ruling dismissed part of the SEC lawsuit against Binance. Judge Berman threw out the SEC’s claims that BNB is being illegally traded on the secondary market. She also dismissed assertions related to the sales of Binance USD stablecoin by the SEC.
Binance and CZ’s legal team, however, contend that position and criticized the SEC for lacking regulatory clarity in overseeing virtual assets. The lawyers questioned the SEC’s refusal to state in clear terms crypto asset transactions that pass as investment contracts and those that do not. They suggest that the SEC come out plainly to state before a court, or to litigants and market participants the standard rules and classification.
The defendant lawyers referenced the recent claim that transactions involving Ethereum are investment contracts. To the lawyers, the regulatory authority is choosing winners and losers subjectively which is not good for the sector.
Any End to Binance’s Legal Tussles?
Binance and its Founder have been locked in a legal battle with the SEC since June 2023. This case is different from the criminal charges brought against the former CEO and Binance Holdings by the Department of Justice.
Binance, the world’s largest crypto exchange in trading volume in that case admitted to violating anti-money laundering laws and unlicensed money transactions. The court fined Binance $4.3 billion while Changpeng Zhao spent four months in a US jail. CZ has since completed his jail term.
Legal experts say they look forward to how the legal battle will unfold in the coming months. Some maintain that Binance has recently, under the leadership of Richard Teng, managed to overcome regulatory hurdles. Teng became CEO in November 2023 after CZ pleaded guilty to criminal charges.
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