Binance vs SEC: legal battle escalates, latest news



Latest news from Binance, which, together with CEO Changpeng Zhao, is filing a motion to dismiss the lawsuit filed by the SEC.

Specifically, Binance Holdings and its US counterpart filed a motion seeking dismissal of the lawsuit filed by the SEC against them. 

Binance news: Changpeng Zhao supports fight for justice in dispute with SEC 

As anticipated, Binance CEO Changpeng “CZ” Zhao and his cryptocurrency exchange platform have joined forces to file a joint motion seeking the dismissal of the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against them.

Specifically, in a legal filing dated Sept. 21, filed in the U.S. District Court for the District of Columbia, both Binance Holdings and Zhao argued that the SEC had exceeded its powers in addressing their lawsuit.

In the detailed 60-page petition, lawyers for Binance and Zhao accused the SEC of failing to establish clear guidelines for the cryptocurrency industry before taking legal action against the crypto exchange.

As a result, they argued that the SEC was trying to retroactively extend its regulatory authority over the cryptocurrency sector, according to the statement: 

“The SEC is pursuing these new theories retroactively, seeking to assign responsibility for crypto asset sales that occurred as early as July 2017, before the SEC provided any public guidance on cryptocurrencies. It is clear that the SEC’s lawsuit has no basis in current securities laws.”

Allegations of misinterpretations of securities laws

Binance’s lawyers have also argued that the SEC is misinterpreting securities laws and their impact on cryptocurrencies.

In an attempt to assert its regulatory control over the cryptocurrency industry, the SEC allegedly distorted its interpretation of securities laws in the filing.

In addition to the petition filed by Binance and Changpeng Zhao, the U.S. cryptocurrency exchange group, known legally as BAM Trading Services but operating as Binance.US, also made claims to dismiss the allegations in a separate 56-page filing filed the same day.

Recall that the SEC sued Binance and its affiliates on June 5, alleging that Binance was selling unregistered securities and operating illegally in the United States.

The SEC’s legal action against Binance was preceded three months earlier by a similar action by the Commodity Futures Trading Commission (CFTC), which sued Binance for failing to register with the agency and for failing to comply with many of its directives.

Trading activity on Binance.US has been hit hard by the ongoing regulatory initiatives against the platform, with daily trading volumes down 98 percent since September 2022. 

In addition, on September 13, Binance.US laid off 30 percent of its remaining staff, with President and CEO Brian Shroder leaving the company.

CZ denies rumors of stablecoin removal in Europe due to MiCA

Recently Changpeng Zhao denied rumors about the removal of stablecoins in Europe due to upcoming MiCA regulations. 

Specifically, as CoinDesk reports, a Binance executive said that the exchange was considering removing stablecoins in Europe because future regulations had not yet approved any stablecoin designs.

In response to these statements, Changpeng Zhao said that the Binance executive’s statement had been interpreted out of context. He also added that the platform has “some partners who are launching EUR and other stablecoins in a fully compliant manner.” 

In a separate blog post, Binance expressed confidence that a constructive solution will be found before the deadline in order to avoid a negative impact on the European cryptocurrency market and the competitiveness of European cryptocurrency exchanges on a global scale.

However, Binance admitted that upcoming MiCA regulations would require all EU exchanges to delist stablecoins whose issuers do not hold Electronic Money Institution (EMI) licenses.

Despite the regulatory complexity surrounding stablecoins in Europe, Binance has sought to expand stablecoin options on its platform following regulatory challenges encountered with Binance USD (BUSD) issued by Paxos

Earlier this year, in fact, Binance heavily promoted TrueUSD, linking it to Justin Sun, but later pushed users toward First Digital USD (FDUSD), a Hong Kong-licensed stablecoin created by First Digital Group, to incentivize its use on Binance.