Binance Requests Dismissal of SEC Lawsuit
Binance has once again asked the United States District Court for the District of Columbia to dismiss the lawsuit filed by the Securities and Exchange Commission (SEC). Despite reaching a settlement with the Department of Justice, Binance and its co-founder still face legal challenges.
Binance Argues SEC Lacks Authority Over Crypto Sales
In its court filing, Binance claimed that there was no investment contract when customers purchased crypto tokens on its platform. This lack of an investment contract, according to Binance, is grounds for dismissing the case. Additionally, Binance argued that the SEC does not have statutory authority over exchanges’ sales of crypto assets.
“Yet the SEC now asks this Court to accept a novel, contorted interpretation of the securities laws, hinging virtually its entire case on the argument that an ‘investment contract’ need not include either an investment or a contract.”
Binance also challenged the SEC’s failure to prove that BNB token holders profited from Binance Holdings Limited’s efforts. The SEC must demonstrate that “profits flow predominantly from the efforts of others” for an investment to be considered a security.
Binance’s Legal Battles Continue
Despite fighting to dismiss the SEC lawsuit, Binance agreed to pay $4.3 billion in settlement to US regulators and saw its co-founder step down as CEO. Meanwhile, BNB has underperformed compared to Bitcoin, with a 16% underperformance since late October.
Hot Take: Binance Asserts Lack of Statutory Authority in SEC Lawsuit
Binance is pushing back against the SEC’s lawsuit, claiming that it lacks statutory authority over exchanges’ sales of crypto assets. The company argues that the investment contract did not exist when customers purchased crypto tokens through its platform. Binance also challenges the SEC’s failure to prove that BNB token holders profited from the company’s efforts. Despite these legal battles, Binance recently settled with the Department of Justice, agreeing to pay over $4 billion in a settlement. However, the consequences of these legal challenges are evident in BNB’s underperformance compared to Bitcoin.
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