SEC Defends Lawsuit Against Binance and CZ Over Securities Claims
The United States Securities and Exchange Commission (SEC) recently responded to a motion to dismiss its amended suit against Binance, Binance.US, and former Binance CEO Changpeng Zhao. The SEC alleges that these entities operated an unregistered securities exchange by selling ten cryptocurrencies on the secondary market using the exchange’s BNB coin.
After Judge Amy Berman Jackson questioned the initial complaint, the SEC filed an amended complaint that addresses her concerns in a more detailed manner. In response, Binance and Zhao filed a motion to dismiss the complaint on Nov. 4.
The SEC’s Memorandum of Law opposing the motion argues that the SEC’s complaint satisfies the Howey test, a legal standard established by the US Supreme Court in 1946 to determine if an asset qualifies as a security. The memorandum delves into the specifics of each prong of the test and reiterates the SEC’s position on the matter.
In addition to the legal arguments, the SEC also includes new allegations related to the status of the cryptocurrencies and Binance’s BNB when they are sold on the secondary market. The SEC’s filing also addresses criticisms of its cryptocurrency policy, stating, “The foretold vast and purported suffocating assertion of regulatory dominion over an entire industry has not occurred, but they complain about that, too.”
The SEC initially filed the case against Binance and Zhao on June 5, 2023, focusing on ten specific coins, including Solana, Cardano, Polygon, and others. The SEC has also filed similar suits against other cryptocurrency exchanges, such as Coinbase, claiming that a total of 68 cryptocurrencies are securities across all cases.
Overall, the legal battle between the SEC and Binance continues, with both sides presenting arguments and counterarguments in court. The outcome of this case could have significant implications for the cryptocurrency industry and its regulatory landscape. Stay tuned for further updates on this ongoing saga.
