Binance and CZ Seek Dismissal of SEC Lawsuit Over Crypto Securities Allegations
Crypto News – Amidst a backdrop of uncertainty and a downturn in the Bitcoin and cryptocurrency markets, Binance Holdings, along with its former CEO Changpeng “CZ” Zhao, have taken decisive legal action. They’ve filed a motion urging the U.S. Securities and Exchange Commission (SEC) to dismiss their lawsuit, alleging lack of substantial evidence.
The suit, which also involves Binance’s American subsidiary, Binance.US, centers on the SEC’s claims of violations of securities laws and investment contracts. Binance.US has echoed the dismissal request, arguing the SEC’s allegations are unfounded.
The heart of the dispute lies in the interpretation of the Howey Test, a legal standard used to determine what constitutes a security. The SEC contends that investments, with or without an investment contract, fall within the realm of securities laws. However, Binance counters this interpretation, asserting the SEC has overstepped its boundaries, extending securities laws beyond their intended scope, particularly in international contexts.
Binance’s defense hinges on several key arguments. They assert that the SEC has not convincingly demonstrated that any tokens, BNB vaults, or simple earn products are securities. Furthermore, they argue that the claims regarding the BNB offering are time-barred. Binance also raises procedural concerns, questioning the SEC’s jurisdiction over Changpeng Zhao and criticizing the lack of fair notice that would warrant dismissal.
On the other hand, Binance.US maintains that the SEC has failed to prove their products are securities and has made no valid claims of fraud against its customers or equity investors.
The SEC, standing firm in its position, has opposed the motion to dismiss the lawsuit. They argue that the defendants, Binance and CZ, are attempting to skirt the Howey Test violations. The commission also emphasizes its long-standing role in protecting investors under existing securities laws, refusing to concede to accusations of overreach in the crypto industry.
Amid these legal volleys, Binance has raised concerns about the SEC’s procedural conduct, particularly its efforts to link a $4.3 billion guilty plea and settlement agreement with the Department of Justice to this ongoing lawsuit. This legal battle marks a significant moment in the intersection of cryptocurrency and regulatory oversight, with implications that could resonate throughout the financial world.
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