- The SEC has filed a counter-motion to Binance’s motion to dismiss the lawsuit.
- The SEC alleges that Binance’s arguments are “incorrect, tortured, absurd, and unsupported by any court.”
- The SEC quoted Binance’s Chief Compliance Officer, who allegedly admitted that Binance was “operating as a fking unlicensed securities exchange in the USA.”
The legal dispute between the U.S. Securities and Exchange Commission (SEC) and Binance continues to go back and forth.
According to recent reports, this dispute has escalated one step further, as the SEC recently responded to Binance’s motion to dismiss the lawsuit altogether.
The SEC, firing back, has described Binance’s arguments as “tortured” and “absurd”.
Here’s how things are about to heat up between both parties.
Binance’s Motion to Dismiss
Binance, its CEO, Changpeng Zhao (CZ), along with its US counterpart, Binance.US dragged to court by the SEC in June 2023.
The SEC claimed that the company was selling unregistered securities, offering investment contracts to US customers, and was operating as an illegal exchange within the country.
Binance, in a bid to counter the SEC, simply filed a filed a motion against the lawsuit in September.
In this motion, Binance urged the court to dismiss the lawsuit altogether.
Binance also claimed that the SEC (once again), had failed to provide clear regulation, and that it only served (Binance) the lawsuit after misapplying existing securities laws.
Binance also argued that the SEC is out of its jurisdiction, trying to regulate crypto transactions that happened outside of the U.S.
Binance also says that the lawsuit violates the “major questions doctrine”. For the unaware, the “major questions doctrine” is a legal principle that prevents federal agencies from applying their own interpretations to unclear laws.
Gensler And The SEC’s Counter Attack
In a counter-motion filed on Nov. 7, the SEC promptly rejected Binance’s arguments and asked the court to deny the crypto exchange’s request.
The SEC’ filing stated that Binance “knowingly” violated several federal securities laws, and that areguments are incorrect, tortured, absurd and unsupported by any court.
Page 1 of the document, under the preliminary statement says:
“No court has adopted Defendants’ tortured interpretation of the law. To the contrary, courts have consistently rejected it, and this Court should as well.”
The SEC also argued that Binance “never complied” with the securities laws, and it acted “deliberately”.
The SEC even went as far as quoting Binance’s Chief Compliance Officer again in the preliminary statement as follows:
“Binance’s Chief Compliance Officer crudely but succinctly summed up this case when he admitted that Binance was “operating as a fking unlicensed securities exchange in the USA bro.”
According to the filing, Binance’s Chief Compliance Officer allegedly admitted that Binance was “operating as a fking unlicensed securities exchange in the USA”
The SEC also claimed that Binance’s comparison of crypto assets to “supermarket items like oranges” was “absurd”.
It went further to say that the exchange’s crypto sales including the BNB ICO, BUSD as a stablecoin, and programs like Binance’s Vault, staking and Binance Earn, were investment contracts under the Howey test.
Binance’s “major questions doctrine” argument was also countered. The SEC says that this argument is ”misplaced” and that if the court granted Binance’s motion, “decades of foundational precedent” would be dismantled.
Overall, the court has not yet ruled on Binance’s motion to dismiss, and the case is still ongoing.
However, should the SEC get its way, there might be some significant implications for the crypto ecosystem. If the SEC gets its way with suing such a large entity like Binance, not many others would remain safe as the crypto industry continues to evolve.
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