Binance Responds to SEC’s Attempt to Include Guilty Plea in Legal Proceedings
Binance Holdings and its former CEO, Changpeng Zhao, have responded to the United States Securities and Exchange Commission’s (SEC) move to include Binance’s admission of guilt to the Department of Justice (DOJ) in its own legal proceedings.
In a filing submitted to the U.S. District Court for the District of Columbia, Binance argued that the SEC’s attempt to include the $4.3 billion guilty plea and settlement agreement with the DOJ in the ongoing case was procedurally incorrect.
The Background of the Legal Case
The Binance-SEC legal case began on June 5, 2023, when the SEC accused the company of securities law violations, including mismanagement of customer assets and redirecting customer assets.
A separate settlement between Binance, its former CEO, and the DOJ was negotiated in November. The settlement required Binance to pay $4.3 billion in penalties and comply with U.S. regulations while continuing its operations.
SEC’s Argument and Binance’s Response
The SEC argued that the federal court overseeing its case should consider the statements and acknowledgments made by Binance and Zhao in the DOJ settlement. The SEC claimed that these settlements demonstrated Binance’s awareness of operating in the U.S. and serving U.S. customers.
Binance, on the other hand, contended that the SEC failed to show how these resolutions were relevant to its claims against Binance Holdings and Zhao.
Binance’s Argument Against SEC Notice
In court papers filed on December 12, 2023, Binance argued that the SEC notice does not substantiate its claims from June 2023. The company stated that presenting a judicial notice is not a substitute for amending a complaint.
Binance also claimed that the SEC’s attempt to leverage resolutions with other agencies indicates a lack of information regarding appropriate regulatory authority on the SEC’s part.
Hot Take: Binance Challenges SEC’s Inclusion of Guilty Plea
Binance Holdings and its former CEO, Changpeng Zhao, have responded to the SEC’s attempt to include Binance’s guilty plea in its legal proceedings. Binance argues that this attempt is procedurally incorrect and should not be allowed. The ongoing legal case between Binance and the SEC began in June 2023, with the SEC accusing the company of securities law violations. A separate settlement was negotiated with the DOJ, requiring Binance to pay penalties and adhere to U.S. regulations. The SEC contends that the federal court should consider the statements made in this settlement, but Binance argues that they are irrelevant to the SEC’s claims. Binance filed court papers stating that the SEC notice does not substantiate its claims and that leveraging resolutions with other agencies shows a lack of regulatory authority on the SEC’s part.