Binance and CEO Changpeng Zhao ask Court to Dismiss SEC Suit – Binance CEO Changpeng “CZ” Zhao and his cryptocurrency exchange, along with Binance Holdings, have jointly submitted a motion requesting the dismissal of the lawsuit filed by the United States Securities and Exchange Commission (SEC) against them. In a filing made on September 21 in the United States District Court for the District of Columbia, both Binance Holdings and Zhao contended that the SEC had exceeded its jurisdiction in the lawsuit.
The 60-page petition, presented by legal representatives of Binance and Zhao, alleged that the SEC had not provided clear industry guidelines prior to initiating legal action against the cryptocurrency exchange. Consequently, they argued that the SEC was attempting to retroactively assert regulatory authority over the cryptocurrency sector.
“The SEC pursues these novel theories retroactively, seeking to impose liability for sales of crypto assets that occurred as far back as July 2017, before the SEC provided any public guidance concerning cryptocurrency.” “It is clear that the SEC’s lawsuit has no foundation in the currently enacted securities laws.” Attorneys representing Binance further claimed that the regulatory body had a fundamental misunderstanding of how securities laws should be applied to cryptocurrency assets.
“In attempting to claim regulatory power over the crypto industry, the SEC distorts the text of the securities laws,” read the filing. In addition to Binance and Zhao’s request, Binance’s American counterpart, Binance.US, officially known as BAM Trading Services, reportedly filed a separate 56-page motion for the dismissal of charges on the same day.
The SEC filed a lawsuit against Binance and its affiliates on June 5, alleging the sale of unregistered securities and unlawful operations in the United States. This action by the SEC followed a similar move by the Commodity Futures Trading Commission (CFTC), which also sued Binance three months earlier for failing to register and violating several of its guidelines.
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The ongoing regulatory actions against the exchange have significantly impacted trading activity on Binance.US, leading to a more than 98% decrease in daily trading volumes since September 2022. On September 13, Binance.US downsized its workforce by 30%, and its president and CEO, Brian Shroder, also left the company.