Binance.US, the American arm of the global crypto exchange Binance, is gearing up for a protracted legal conflict with the U.S. Securities and Exchange Commission (SEC).
Following a recent court decision allowing the SEC’s case to proceed, Binance.US emphasized its readiness for a lengthy period of legal discovery. In a statement released on social media platform X, the company expressed its anticipation of proceeding with the judicial process, demonstrating its commitment to compliance.
On Friday, the Court decided that the SEC’s case against https://t.co/AZwoBOh0gq will continue. We were prepared for this and look forward to having this case move forward in the judicial process.https://t.co/AZwoBOh0gq was established with the express purpose of serving United…
— Binance.US (@BinanceUS) July 1, 2024
The SEC’s allegations against Binance.US include securities law violations, offering unregistered investment products, and anti-fraud breaches. Despite these serious charges, Binance.US maintains that it was specifically created to serve U.S. customers while adhering to local regulations. The company asserted,
“We maintain 1:1 reserves for all customer assets and have robust compliance and risk programs which ensure our platform’s safety, security, and integrity.”
Criticism of SEC’s Regulatory Approach
In addition to outlining its commitment to compliance, Binance.US criticized the SEC’s approach to regulation. The company described the SEC’s actions as “regulation by enforcement,” suggesting that the federal agency’s tactics are politically motivated. Binance.US claimed that many firms in the crypto industry have similarly fallen victim to what it perceives as the SEC’s overreach under its current leadership, led by Chair Gary Gensler.
Binance.US also addressed the challenges posed by the SEC’s actions, stating that the regulator still needs to identify concrete evidence of wrongdoing on the part of the exchange. The firm expressed confidence in its legal position, asserting that the SEC’s case is “unsupported by the facts or the law” following an 11-month discovery process.
Despite Binance.US’s confidence, the company was unable to convince a U.S. court to dismiss most of the SEC’s claims in a June 28 court filing. Judge Amy Berman Jackson ruled that claims related to Binance’s staking program, the sale of BNB after its initial coin offering, and anti-fraud violations will proceed. Additionally, the allegation that Binance CEO Changpeng “CZ” Zhao acted as a “control person” will continue to be part of the case.
However, the court did dismiss some of the SEC’s claims. Specifically, claims related to BNB secondary market sales and all sales associated with the Binance USD (BUSD) stablecoin were dismissed. This partial dismissal provides a slight reprieve for Binance.US in its ongoing legal struggle.
Commitment to U.S. Regulations
Binance.US reiterated its dedication to U.S. regulations, emphasizing its role in providing services to American customers within the legal framework. The company stressed that it maintains a high standard of compliance and risk management to ensure the security and integrity of its platform. This commitment is central to Binance.US’s defense against the SEC’s allegations and strategy in the upcoming legal proceedings.
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