Binance Counters SEC Lawsuit, Asserts Lack of Jurisdiction

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Binance, the global cryptocurrency juggernaut, has gone on the offensive against the U.S. Securities and Exchange Commission (SEC), contesting the regulator’s lawsuit alleging securities law violations. The exchange, alongside its U.S. affiliate Binance.US and CEO Changpeng “CZ” Zhao, filed a motion to dismiss the SEC’s charges.

In a bold move, Binance and its co-defendants argue that the SEC’s reach doesn’t extend to their activities. They maintain that Binance primarily operates as a non-U.S. entity, refraining from soliciting or accepting U.S. customers. Furthermore, they assert that Binance.US is a separate, fully compliant entity under U.S. laws, emphasizing CZ’s lack of personal involvement in its operations and his non-U.S. residency.

JUST IN:

Binance and CEO Changpeng Zhao seek dismissal of SEC lawsuit, citing regulatory overreach

— Whale (@WhaleChart) September 22, 2023

The motion challenges the SEC on multiple fronts. Firstly, it contends that the regulator hasn’t pinpointed specific digital asset securities allegedly offered or sold by Binance. Secondly, it critiques the SEC’s inability to define clear criteria for labeling cryptocurrencies as securities in a rapidly evolving industry. Binance insists that the SEC is relying on the outdated Howey test, designed for traditional investments, rather than adapting to the innovative, decentralized nature of cryptocurrencies.

Binance Is Seeking Dismissal With Prejudice

Binance and its co-defendants are not just seeking dismissal; they want it with prejudice, preventing a future filing of similar charges. Additionally, they’ve asked the court to reimburse their attorney fees and defense costs incurred in fighting the SEC’s claims.

This lawsuit adds to Binance’s growing list of global legal challenges. Regulators across the world have intensified their scrutiny of the exchange’s compliance with local laws and consumer protection standards. Binance has consistently voiced its commitment to collaboration with regulators and enhancing its compliance measures.

The outcome of this legal battle could potentially set a precedent for the jurisdictional reach of regulatory bodies in the digital asset sphere. Binance’s staunch defense reflects the broader industry’s call for balanced, adaptable regulation that fosters innovation while ensuring investor protection.

 

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