Binance Files Motion to Dismiss SEC Claims
Binance, along with its cofounder Changpeng Zhao (CZ), has filed a joint motion to dismiss claims made by the U.S. Securities and Exchange Commission (SEC). The company argues that the SEC lacks authority to impose actions on token sales from 2017, as it has provided little guidance on such transactions. Binance further argues that the SEC’s claims fail under the Howey Test, which requires a legal relationship between users and platforms. The agency alleges that Binance violated registration requirements in U.S. securities law when offering various crypto products and assets.
SEC Distorts Securities Laws, Say Defendants
The defendants argue that the SEC distorts securities laws in its attempt to claim regulatory power over the crypto industry. They state that only the U.S. Congress has the authority to make policy decisions and define investment contracts. Binance and CZ claim that the SEC seeks to expand its jurisdiction globally by including transactions on foreign cryptocurrency platforms.
Motion To Dismiss Claims
Binance seeks to dismiss all of the SEC’s claims on the grounds that they fail to prove any of the contested crypto assets are securities. The company argues that the SEC oversteps its jurisdiction outside of the United States by requiring foreign platforms to register if accessed by American citizens online.
In related news, Magistrate Judge Zia M. Faruqui recently issued a minute order regarding the SEC’s motion for a protective order on Binance’s confidential documents.
Hot Take: Binance Challenges SEC’s Authority
Binance’s recent motion to dismiss the SEC’s claims highlights the ongoing battle between regulators and cryptocurrency exchanges. The company argues that the SEC lacks authority due to its limited guidance on token sales and attempts to expand its jurisdiction beyond the United States. This case will likely have significant implications for the regulation of the crypto asset ecosystem, as it questions the SEC’s interpretation of securities laws and its reach on a global scale.
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