SEC Rejects Binance's Motion to Dismiss Lawsuit, Cites Willful Ignorance of Laws
Summary:
The SEC has rebutted Binance's motion to dismiss a lawsuit, arguing the crypto exchange's rationale is rooted in incorrect legal interpretation with no solid legal grounds. In its latest filing, the SEC counters Binance's previous assertions, stating that the exchange, along with its subsidiary Binance.US and founder Changpeng "CZ" Zhao intentionally ignored federal securities laws. The regulator also dismissed Binance's argument that the lawsuit infringes on the major questions doctrine, warning that an approval might lead to the disruption of long-standing legal precedents.
The U.S. securities regulator has responded vehemently to Binance's attempts to have a lawsuit against them dismissed, arguing that the leading crypto exchange's arguments are rooted in incorrect legal interpretation and devoid of legal basis. Documents filed in court by the SEC on November 7th effectively debunked Binance's preliminary attempts to shed the lawsuit, saying that no court has condoned Binance's strained reading of the law. The SEC had previously targeted Binance in June, asserting that the exchange, subsidiary Binance.US, and founder Changpeng "CZ" Zhao were accountable for the sale of unregistered securities and the failure to register as an exchange in the U.S. Binance countered their claims, assuming that the SEC's crypto guidelines were futile, their understanding wrong, and their allegations overreaching. In this last modified return, SEC notes that Binance intentionally ignored federal securities laws, stating, “Binance’s Chief Compliance Officer summarily qualified the case when he acknowledged that Binance was ‘operating as an unlicensed securities exchange in the USA.’ He was indeed correct.” It scoffed at the exchange’s arguments comparing crypto to supermarket items like oranges, and blasted Binance's sale of cryptocurrency as a violation of the Howey investment contract test. The regulator also emphasized that Binance’s BNB initial coin offering was contrary to securities laws, and related investment activities involving Binance USD (BUSD), Staking, Vault, and Earn were legitimate investment contracts. It dismissed Binance's claim that the lawsuit infringes on the major questions doctrine, explaining that dismissing Binance's plea might eliminate decades-old legal precedents and create a stringent framework to replace a flexible one.
Published At
11/9/2023 1:45:25 AM
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