Binance, Binance.US, and Changpeng Zhao have collectively filed a movement to dismiss a lawsuit introduced by the United States Securities and Exchange Commission (SEC).
In their 60-page petition submitted on September 21, their authorized group contends that the SEC exceeded its regulatory jurisdiction by submitting the lawsuit in opposition to them.
The defendants argue that the SEC failed to present clear tips for the cryptocurrency sector earlier than taking authorized motion, successfully imposing its authority retroactively.
The SEC’s lawsuit accuses Binance, Zhao, and Binance.US of itemizing unregistered securities within the type of numerous cryptocurrencies for buying and selling and funding by U.S. traders.
This authorized battle has prompted a dispute over the accessibility of Binance.US buyer funds.
Binance Claims SEC has Expanded Definition of “Investment Contract”
One of the important thing arguments introduced within the movement to dismiss is that the SEC has expanded its definition of “investment contract” to embody a variety of crypto property and transactions.
The authorized group for Binance and Zhao asserts that the SEC’s interpretation of securities legal guidelines and their utility to cryptocurrencies is basically flawed.
The movement emphasizes that the SEC’s lawsuit seeks to maintain Binance and its associates accountable for crypto asset gross sales relationship way back to July 2017, regardless of the absence of clear regulatory steerage on cryptocurrencies at the moment.
The petition means that the SEC’s lawsuit lacks a stable basis inside current securities legal guidelines.
SEC is Overreaching to Regulate Crypto
Both Binance and Zhao contend that Congress has thought of quite a few proposals since 2019 to set up a complete framework for cryptocurrencies and their buying and selling platforms.
None of those proposals would grant unique regulatory authority over the crypto business to the SEC.
Consequently, they argue that the SEC is overreaching in its pursuit of regulatory management over the crypto sector.
In a separate 56-page submitting on the identical day, Binance.US, legally often known as BAM Trading Services Inc., additionally moved to have the costs in opposition to it dismissed.
The authorized motion taken by the SEC in opposition to Binance and its associates adopted the same lawsuit by the Commodity Futures Trading Commission (CFTC) that accused Binance of working illegally within the United States and failing to register with the CFTC.
The ongoing regulatory actions in opposition to Binance, together with the SEC lawsuit, have had a considerable impression on buying and selling exercise on Binance.US. Daily buying and selling volumes on the platform have plummeted by over 98% since September 2022. In response to these challenges, Binance.US laid off 30% of its remaining workforce and noticed its president and CEO, Brian Shroder, depart the corporate.