United States Securities and Exchange Commission v. #Binance , Binance.US, and Changpeng Zhao, a motion to dismiss (SEC).
In a 60-page petition filed on September 21st, their legal team argues that the SEC's lawsuit against them is outside of the SEC's authority as a regulator.
The defendants claim the SEC improperly imposed its authority by taking legal action against the cryptocurrency industry without first issuing clear guidelines for the industry.
The SEC has filed a lawsuit against Binance, Zhao, and Binance.US, alleging that they have offered unregistered securities to U.S. investors in the form of various cryptocurrencies.
Binance's availability has become contentious because of this lawsuit.
Money from American clients.
Binance asserts The SEC now includes more types of agreements as "investment contracts."
The motion to dismiss argues, among other things, that the SEC's definition of "investment contract" has been broadened to include various crypto assets and transactions.
The legal team representing Binance and Zhao argues that the SEC's application of securities laws to cryptocurrencies is flawed.
The motion emphasises that the SEC is suing Binance and its affiliates for selling cryptocurrency assets as early as July 2017 when there was little to no oversight from regulators.
According to the petition, the SEC's lawsuit has weak legal footing under current securities laws.
The SEC's Cryptocurrency Regulations Go Too Far
To establish a comprehensive framework for cryptocurrencies and their trading platforms, Binance and Zhao claim that Congress has considered numerous proposals since 2019.
None of these alternatives would give the SEC monopoly power over cryptocurrency regulation.
Therefore, they claim the SEC is going too far in its efforts to regulate the cryptocurrency industry.
Binance.US, also known as BAM Trading Services Inc. legally, filed a separate 56-page motion to dismiss the charges against it on the same day.
Following a similar lawsuit filed by the Commodity Futures Trading Commission (CFTC), in which Binance was accused of operating illegally in the United States and failing to register with the CFTC, the SEC has taken legal action against Binance and its affiliates.
Trading activity on Binance.US has been severely impacted by the ongoing regulatory actions against Binance, including the SEC lawsuit. Since September 2022, the platform's daily trading volumes have dropped by over 98%. The company's president and CEO, Brian Shroder, also left, and the remaining 30% of the workforce was laid off.