Binance and CEO Changpeng Zhao Seek Dismissal of SEC Lawsuit
Binance Holdings and its CEO, Changpeng Zhao, have filed a motion requesting the dismissal of a lawsuit brought against them by the Securities and Exchange Commission (SEC). They argue that the SEC has exceeded its authority in the case.
SEC Lawsuit Seen as Retroactive Regulatory Action
In their 60-page motion filed on September 21, Binance and Zhao claim that the SEC’s lawsuit is a retroactive attempt to use regulatory power against them after failing to establish clear guidelines. They argue that as recently as 2021, SEC Chair Gary Gensler acknowledged that there was no regulatory framework for crypto exchanges under the authority of the SEC.
SEC’s Reversal on Crypto Assets
The filing also highlights how the SEC changed its position last year by asserting that almost all crypto assets are securities subject to its authority. Binance and Zhao argue that this sudden reversal is unfounded and unsupported by currently enacted securities laws.
Challenging the SEC’s Interpretation of Securities Regulations
The lawyers representing Binance and Zhao accuse the SEC of misinterpreting securities regulations and applying them incorrectly to digital assets. They challenge the SEC’s argument that digital assets should be classified as securities.
Binance.US Also Seeks Dismissal of Lawsuit
Binance.US, the US division of Binance, has also filed for a dismissal of a separate lawsuit brought by the SEC. They argue that this case also lacks foundation under current securities laws. Both filings invoke the “major questions doctrine,” which instructs federal agencies to wait for Congressional authority over economic or political matters.
Legal Battle with SEC Since June
Binance and its CEO have been embroiled in a legal battle with the SEC since June when the authority sued them for various infractions, including mishandling customer funds and selling unregistered securities. The lawsuits have negatively impacted Binance’s US business and led to the departure of top executives. Binance.US has also laid off 30% of its employees due to a decline in trading volume.
Hot Take: Binance and Zhao Fight Back Against SEC Lawsuit
Binance Holdings and CEO Changpeng Zhao are pushing back against the Securities and Exchange Commission (SEC) by requesting the dismissal of the lawsuit brought against them. They argue that the SEC has exceeded its authority and is engaging in retroactive regulatory action. Binance and Zhao also challenge the SEC’s interpretation of securities regulations concerning digital assets. This legal battle has been ongoing since June and has had significant repercussions for Binance’s US operations, including executive departures and layoffs. It remains to be seen how this conflict between Binance and the SEC will unfold.
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