- Binance, CZ, and U.S. affiliate have challenged the SEC in court.
- The petitioners want the commission to dismiss its lawsuit against them.
- The motion comes in light of increased scrutiny over the exchange.
Binance CEO Changpeng “CZ” Zhao, his crypto exchange, and U.S. affiliate have filed a joint motion in court seeking to dismiss the U.S. Securities and Exchange Commission (SEC) lawsuit against them.
On June 5, the securities watchdog filed 13 charges against Binance entities and founder CZ, alleging “a variety of securities law violations,” among them operating unregistered exchanges, unregistered offer and sale of securities, and misrepresenting trading control and oversight on the Binance.US platform.
Overreached Oversight Without Guidance
In a court filing dated September 21, lawyers representing both Binance and CZ took a jab at the securities watchdog, claiming that the commission had “overstepped its authority” in the lawsuit against them.
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The lawyers representing the petitioners slammed the SEC for retroactively imposing its regulatory authority over the crypto industry, arguing that the regulator failed to introduce clear guidelines for the sector ahead of its lawsuit against Binance.
“The SEC pursues these novel theories retroactively, seeking to impose liability for sales of crypto assets that occurred as far back as July 2017, before the SEC provided any public guidance concerning cryptocurrency...It is clear that the SEC’s lawsuit has no foundation in the currently enacted securities laws,” the court filing read.
Blaming the SEC for seeking to encompass digital assets under its authority despite Congress’s lack of explicit legislation, the petition lawyers stated that the regulator hadn’t “plausibly alleged” multiple securities-related violations by Binance; hence, the June lawsuit should be dismissed.
Motion to Dismiss SEC Claims
According to the lawyers, the securities watchdog has failed to plausibly demonstrate that any of the crypto assets the commission is contesting is a security.
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The petitioners asked the court to dismiss the SEC lawsuit, arguing that the commission violates the securities law purview outside the United States when it asks foreign companies to register in the country if an American citizen accesses the platform via the Internet.
Read the take of the Binance CEO on the recent executive exodus from the exchange:
Binance CEO Dismisses Solvency Concerns Amid Top Exec Exits
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