Binance used ‘tortured’ interpretation of law in bid to toss suit, says SEC
Binances arguments used in its movement to dismiss a lawsuit from the United States securities regulator relies on an incorrect legal analysis and have no basis in law, the regulator has argued.In a Nov. 7 court filing the SEC rebuffed Binances earlier quote to toss the regulators suit saying no court has adopted Binances “tortured interpretation of the law.” The SEC took legal action against Binance in June alleging it, Binance.US and its founder Changpeng “CZ” Zhao failed and offered unregistered securities to register as an exchange in the United States. Binance argued the SEC failed to introduce crypto standards, misinterpreted securities laws and applied them to crypto and called the match an overstep of its authority.In its newest rebuttal, the SEC declared Binance “never complied” with federal securities laws which was “a purposeful choice.”” Binances Chief Compliance Officer crudely but succinctly summed up this case when he confessed that Binance was operating as a fking unlicensed securities exchange in the USA brother. He was right.” It included Binances arguments that compared crypto to “supermarket items like oranges […] are unreasonable” and declared the crypto exchanges crypto sales are financial investment agreements under the Howey test.Related: SEC Inspector General says prohibition on crypto ownership prevents agency hiringThe regulator restated its claims the BNB (BNB) preliminary coin offering breached securities laws and Binance USD (BUSD) in addition to the yield-bearing staking, Vault and Earn programs are investment contracts.Highlighted excerpt of the SECs arguments claiming Binance offered unregistered securities from unregistered exchanges in the U.S. Source: CourtListenerIt likewise rebuffed Binances argument that the fit broke the significant concerns teaching– a 2022 U.S. Supreme Court ruling saying Congress doesnt hand over authority to companies, which other crypto firms have actually pointed out in their objective to press back on the SECs claimed authority.The SEC declared approving Binances dismissal request would “dismantle years of fundamental precedent upon which the nations securities laws operate” and in its place would be a “stiff structure” that overthrows the “broad, flexible routine” of the existing laws.Magazine: The reality behind Cubas Bitcoin revolution– An on-the-ground report
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Other Questions People Ask
What did the SEC argue about Binance's interpretation of the law in its dismissal bid?
The SEC contended that Binance's arguments for dismissing the lawsuit were based on a "tortured interpretation of the law" that lacks legal foundation. In its court filing, the SEC emphasized that no court has accepted Binance's legal reasoning, asserting that the exchange has consistently failed to comply with federal securities laws. This rebuttal highlights the SEC's stance that Binance's claims misinterpret securities regulations as they apply to cryptocurrency.
How did Binance respond to the SEC's allegations regarding unregistered securities?
Binance argued that the SEC misapplied securities laws to cryptocurrency and claimed that the regulatory body had not established clear standards for the crypto industry. The exchange suggested that its operations were akin to selling everyday items, which it deemed unreasonable for classification as securities. However, the SEC countered this by stating that Binance's activities constituted financial investment agreements under the Howey test, reinforcing their position on unregistered securities.
What are the implications of the SEC's claims against Binance for the crypto industry?
The SEC's claims against Binance could have significant repercussions for the broader cryptocurrency market, particularly if the court sides with the regulator. The SEC warned that granting Binance's dismissal request would undermine years of established legal precedent governing securities laws. This could lead to a more rigid regulatory framework, potentially stifling innovation and flexibility within the crypto sector.
What did Binance's Chief Compliance Officer admit regarding its operations?
Binance's Chief Compliance Officer candidly acknowledged that the exchange was operating as an unlicensed securities exchange in the United States. This admission was highlighted by the SEC to illustrate Binance's awareness of its legal standing and regulatory obligations. The SEC used this statement to bolster its argument that Binance intentionally chose not to comply with federal securities laws.
How does the SEC view Binance's comparison of crypto to supermarket items?
The SEC dismissed Binance's analogy comparing cryptocurrency to supermarket items like oranges as unreasonable and irrelevant to legal standards. This comparison was used by Binance to argue against its classification as a securities exchange, but the SEC maintained that such arguments do not hold up under scrutiny. Instead, they reiterated that Binance's crypto sales fall under financial investment agreements, emphasizing the need for regulatory compliance in the crypto space.