Binance’s Legal Arguments Incorrect, Says U.S. SEC
In a recent court filing, the United States securities regulator rejected Binance’s motion to dismiss a lawsuit, stating that the cryptocurrency exchange’s arguments are based on an incorrect legal analysis and have no legal foundation.
The Securities and Exchange Commission (SEC) sued Binance in June, alleging that the exchange, Binance.US, and its founder Changpeng “CZ” Zhao sold unregistered securities and operated as an unlicensed exchange in the United States.
Binance argued that the SEC failed to provide clear crypto guidelines, misinterpreted securities laws, and overstepped its authority. However, the SEC countered by claiming that Binance “never complied” with federal securities laws, highlighting the exchange’s deliberate choice to operate as an unlicensed securities exchange in the United States.
The SEC also dismissed Binance’s comparison of crypto to supermarket items like oranges as absurd, and asserted that the exchange’s crypto sales are indeed investment contracts under the Howey test.
Additionally, the SEC reiterated its claim that Binance’s initial coin offering for Binance Coin (BNB) violated securities laws, and that Binance USD (BUSD) and its associated staking, Vault, and Earn programs are considered investment contracts.
The SEC also pushed back against Binance’s argument that the lawsuit violated the major questions doctrine, arguing that granting Binance’s dismissal request would dismantle decades of foundational precedent upon which the nation’s securities laws operate.
This latest development in the legal battle between Binance and the SEC underscores the growing regulatory scrutiny facing the cryptocurrency industry in the United States.
❗Follow us on Twitter to get all the latest crypto news as soon as they're out! 🚀