Binance and CEO Changpeng Zhao ask court to dismiss SEC suit
Binance CEO Changpeng “CZ” Zhao and his cryptocurrency exchange has filed a joint motion asking for the dismissal of the United States Securities and Exchange Commission (SEC) lawsuit versus them. According to a Sept. 21 filing to the United States District Court, both Binance Holdings and Zhao declared that the financial regulatory had overstepped its authority in the suit against them. In the 60-page petition legal representatives for Binance and Zhao accused the SEC of failing to present clear guidelines for the sector ahead of its suit versus the crypto exchange and as a result, had actually imposed its regulatory authority over the crypto sector retroactively.Binance Holdings and CZs joint movement to dismiss the SEC suit made versus them. Source: CourtListener” The SEC pursues these unique theories retroactively, looking for to impose liability for sales of crypto properties that took place as far back as July 2017, prior to the SEC supplied any public assistance concerning cryptocurrency.”” It is clear that the SECs claim has no foundation in the currently enacted securities laws.” Lawyers for Binance likewise asserted that the regulator fundamentally misinterprets securities laws and their application to crypto properties. ” In attempting to claim regulatory power over the crypto industry, the SEC misshapes the text of the securities laws,” read the filing.In addition to Binance and Zhaos petition, the American outfit of the crypto exchange, Binance.US– legally referred to as BAM Trading Services Inc.– also relocated to have the charges made against it dismissed in a seperate 56-page filing made on the very same day. Related: SEC sees short-lived problem in demand to gain access to Binance.US softwareThe SEC took legal action against Binance and its affiliates on June 5, pushing a series of charges that alleged Binance of using the sale of unregistered securities and for operating illegally in the United States. The SECs move against Binance came three months after the Commodity Futures Trading Commission (CFTC) also took legal action against for Binance for stopping working to sign up with it and for breaking numerous of its standards. Trading activity on Binance.US have been hit hard by the ongoing regulatory action versus the exchange, with daily trading volumes dropping more than 98% from Sept. 2022. On Sept. 13 Binance.US laid off 30% of its remaining labor force, with its president and CEO Brian Shroder also departing the firm. Magazine: How to secure your crypto in an unpredictable market– Bitcoin OGs and professionals weigh in
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Other Questions People Ask
What are the main arguments in the motion filed by Binance and CEO Changpeng Zhao to dismiss the SEC suit?
Binance and CEO Changpeng Zhao argue that the SEC has overstepped its authority by retroactively applying securities laws to transactions that occurred before any clear regulatory guidance was provided. They claim that the SEC's lawsuit lacks a solid foundation in existing securities laws and misinterprets how these laws apply to cryptocurrency. The motion emphasizes that the SEC's approach distorts the legal framework governing securities, which should not be applied retroactively to the crypto sector.
How does the SEC's lawsuit against Binance and CEO Changpeng Zhao impact the cryptocurrency market?
The SEC's lawsuit has created significant uncertainty in the cryptocurrency market, leading to a drastic drop in trading volumes on Binance.US, which fell over 98% since September 2022. This regulatory action has not only affected Binance but has also instilled fear among investors and other crypto exchanges about potential legal repercussions. As a result, many in the industry are closely monitoring the developments of this case, as it could set important precedents for future regulatory actions.
What steps has Binance taken in response to the SEC lawsuit against them?
In response to the SEC lawsuit, Binance and CEO Changpeng Zhao have filed a joint motion seeking dismissal of the charges, arguing that the SEC's claims are unfounded and misinterpret securities laws. Additionally, Binance.US has also filed a separate motion to dismiss the charges against it, indicating a coordinated legal strategy to challenge the SEC's authority. These actions reflect Binance's commitment to defending its operations and clarifying the regulatory landscape for cryptocurrencies.
What implications could the court's decision on Binance and CEO Changpeng Zhao's motion have for future cryptocurrency regulations?
The court's decision on Binance and CEO Changpeng Zhao's motion to dismiss could have far-reaching implications for future cryptocurrency regulations. If the court sides with Binance, it may signal a limitation on the SEC's ability to impose retroactive regulations on crypto transactions, potentially fostering a more favorable environment for cryptocurrency exchanges. Conversely, if the court upholds the SEC's claims, it could reinforce regulatory scrutiny across the entire crypto industry, leading to stricter compliance requirements for all players in the market.