Binance's latest legal filing seeks to dismiss the SEC's amended lawsuit, citing previous rulings that digital assets are not inherently securities.
The defense criticizes the SEC for not providing a clear standard to classify crypto transactions under securities law, highlighting regulatory inconsistencies.
The ongoing legal battle with the SEC and the Department of Justice's charges is critical for Binance’s future in the U.S. market.
Binance and Changpeng Zhao, its former CEO, are now laying efforts against the U.S. Securities and Exchange Commission’s legal actions. The defense initiated the recent legal move, which attempts to dismiss the SEC’s amended complaint. It argues that the agency’s definitions of securities transactions are still inconsistent across the crypto space.
https://twitter.com/WuBlockchain/status/1853731285006745790
In a compelling move on Monday, Binance's legal team submitted a request to dismiss the SEC’s amended lawsuit, which they argue contradicts previous legal standards concerning digital assets. Specifically, the motion highlights a past ruling that declared digital assets do not inherently qualify as securities. The defense criticizes the SEC for still treating secondary market transactions of these assets as securities, a stance that ignores the precedent.
SEC’s Regulatory Clarity Called Into Question
The filing also addresses the SEC's lack of clear regulatory guidelines, which Binance argues leaves market participants needing a clear framework to determine whether their transactions fall under securities laws. “The SEC still refuses to articulate any standard for courts, litigants, or market participants to know which crypto-asset transactions qualify as investment contracts and which do not,” the document states.
This criticism comes as the SEC has been altering its views on major cryptocurrencies, such as Ethereum, further highlighting the agency's inconsistent enforcement approach.
The ongoing lawsuit began in June 2023 and included charges against Zhao and three Binance-related entities over alleged unregistered securities offerings. This case emerged alongside separate criminal charges from the Department of Justice, which concluded with Binance admitting to anti-money laundering shortcomings and agreeing to a significant financial settlement.
Amidst these challenges, the SEC's changing regulatory stance and recent actions, such as issuing a Wells notice to gaming company Immutable, underscore the turbulent regulatory landscape for digital assets.
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