SEC responds to motion to dismiss Binance, CZ suit on unregistered securities
SEC responds to motion to dismiss Binance, CZ suit on unregistered securities
The U.S. Securities and Exchange Commission (SEC) has doubled down on its legal battle against Binance, Binance.US, and former CEO Changpeng Zhao (CZ), asserting that they operated an unregistered securities exchange. The SEC’s claims hinge on the sale of ten cryptocurrencies, allegedly securities, facilitated through Binance's BNB coin.
The SEC’s recent Memorandum of Law counters a motion to dismiss filed by Binance and Zhao. It reiterates the agency’s arguments regarding the Howey test, the standard used to determine what qualifies as a security. The memorandum also expands on the securities status of both the cryptocurrencies and Binance’s BNB token when traded in secondary markets.
The revised filing comes after Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia questioned the logic of the SEC’s original complaint. The amended suit aims to address these concerns, maintaining that the defendants violated federal securities laws.
The SEC’s memorandum also takes a swipe at broader criticisms of its cryptocurrency oversight, remarking that claims of "suffocating regulatory dominion" remain unfounded despite industry objections.
A Pivotal legal battle
The case, initially filed on June 5, 2023, forms part of the SEC’s broader effort to regulate the cryptocurrency industry. The agency has identified 68 cryptocurrencies as securities across various lawsuits, including its high-profile case against Coinbase.
This ongoing litigation underscores the legal uncertainty surrounding cryptocurrency classification and regulation in the U.S. With Binance’s legal team challenging the SEC’s interpretations, the trial could set significant precedents for how cryptocurrencies are treated under securities laws.
As the SEC continues to press its case, the implications for Binance and the wider crypto industry remain substantial. A ruling in favor of the regulator could solidify its authority over digital assets, potentially reshaping the industry’s operational and regulatory landscape.
Meanwhile, the exchange continues to grow and launches On-Chain Yields, starting with Babylon BTC Staking.
