Binance CEO files motion to dismiss SEC lawsuit
On September 21, the CEO of Binance, one of the world’s largest cryptocurrency exchanges, submitted a petition to the court, urging the dismissal of a lawsuit initiated by the U.S. Securities and Exchange Commission (SEC). Changpeng Zhao argued that the SEC was overstepping its jurisdiction by accusing the exchange of various violations, including violating securities regulations, providing misleading information to both regulators and investors, and mishandling client funds.
This development is just one episode in an ongoing legal battle between Binance and U.S. regulatory authorities. The SEC had initially filed a complaint against Binance in June, while the Commodity Futures Trading Commission (CFTC) had lodged a lawsuit back in March. The CFTC’s claim centered around labeling BUSD as a commodity, whereas the SEC contended that this token should be classified as an unregistered security.
Attorney Jeremy Hogan even made a joke about the situation, humorously speculating that in the future, the U.S. Financial Crimes Enforcement Network (FinCEN) may file another lawsuit, alleging BUSD is a currency.
Binance is actively asserting its interests. The company states that regulatory authorities are attempting to retroactively impose penalties on the exchange before establishing clear guidelines for the crypto industry. Lawyers representing Binance contend that the SEC is intentionally misinterpreting securities laws to gain broader authority in overseeing the crypto sector.
Nonetheless, Binance has found support in the legal arena. Recently, a federal court rejected the SEC’s request for access to Binance U.S’ software, insisting that the SEC must provide more specific requests and additional evidence for the ongoing investigation.
Currently, both Binance.US and Binance’s market shares have experienced significant declines, partly due to government regulatory pressures. In early September, the head of Binance.US resigned from the company. Later two high-ranking executives responsible for the Russian market also left the company.
Changpeng Zhao remains optimistic that the judicial system will help crypto companies attain greater regulatory clarity within the crypto industry.