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SEC Hasn't Met Legal Requirements to Sue, Binance Says in Latest Bid to Dismiss Lawsuit ⚖️

In a recent court filing, Binance, Binance.US and former CEO Changpeng Zhao have argued that the U.S. Securities and Exchange Commission (SEC) did not meet the requirements of the “Howey Test” in its suit against the two companies and their founder in June.

Specifically, the entities fought against the SEC’s definition of “investment contracts” in the agency’s lawsuit against them. They stated that none of the transactions at issue contained a contract with a promoter to invest money into a common business enterprise. They also stated that the SEC ignored the requirement that the existence of an “investment contract” must be determined on a transaction-by-transaction basis.

The filing stated,

[Even] if there is ambiguity about how to apply the term ‘investment contract’ to digital assets, such a major question should be addressed by Congress and not by a court, a separation of powers proven necessary by the SEC’s own history of territorial aggrandizement.