Binance CEO Changpeng “CZ” Zhao and his cryptocurrency exchange have filed a joint motion requesting the dismissal of the lawsuit brought by the United States Securities and Exchange Commission (SEC) against them. In a filing to the United States District Court on September 21, Binance Holdings and Zhao claimed that the SEC had exceeded its authority in the lawsuit.
The 60-page petition argues that the SEC failed to provide clear guidelines for the crypto industry prior to filing the lawsuit, and as a result, retroactively imposed regulatory authority on the sector. Binance and Zhao’s lawyers accused the SEC of pursuing novel theories and seeking to impose liability for crypto asset sales that occurred before the commission provided any public guidance on cryptocurrencies.
Binance’s lawyers also claimed that the SEC misinterprets securities laws and their application to crypto assets. They argued that the regulator distorts the text of securities laws in an attempt to exert regulatory power over the crypto industry.
Binance.US, the American branch of the exchange, also filed a separate 56-page motion to dismiss the charges made against it on the same day.
The SEC sued Binance and its affiliates in June, alleging that the exchange offered the sale of unregistered securities and operated illegally in the United States. The lawsuit came after the Commodity Futures Trading Commission (CFTC) also sued Binance for failing to register with the agency and violating its guidelines.
The ongoing regulatory actions against Binance have significantly impacted trading activity on its US platform, with daily trading volumes dropping by more than 98% since September 2022. As a result, Binance.US recently laid off 30% of its remaining workforce and its president and CEO, Brian Shroder, left the company.
Binance CEO Changpeng Zhao and his cryptocurrency exchange, Binance, have requested the dismissal of the SEC’s lawsuit against them. They argue that the SEC exceeded its authority and failed to provide clear guidelines for the crypto industry. Binance’s lawyers also claim that the SEC misinterprets securities laws and distorts their application to crypto assets. The American branch of Binance, Binance.US, has also filed a motion to have the charges dismissed. The SEC sued Binance in June, alleging the sale of unregistered securities and illegal operations in the US.
What is Binance?
Binance is a cryptocurrency exchange founded by Changpeng Zhao in 2017. It is one of the largest and most popular exchanges in the world.
What is the SEC?
The Securities and Exchange Commission (SEC) is a US government agency responsible for protecting investors, maintaining fair and efficient markets, and facilitating capital formation.
Why has the SEC sued Binance?
The SEC has sued Binance, alleging that the exchange offered the sale of unregistered securities and operated illegally in the United States.
What is Binance.US?
Binance.US is the American branch of Binance and operates as a separate entity to comply with US regulations. It provides cryptocurrency trading services to US residents.
How have the regulatory actions affected Binance.US?
The ongoing regulatory actions against Binance have greatly impacted trading activity on Binance.US, with daily trading volumes dropping by more than 98% since September 2022. The exchange has also laid off a significant portion of its workforce and its CEO has left the company.