The legal battle between the U.S. Securities and Exchange Commission (SEC) and Binance, as well as its U.S. subsidiary, Binance.US, is heating up as the SEC continues to press forward with its allegations of security law violations and fraud.
In its latest move, the SEC is pushing back against Binance.US and Binance CEO Changpeng “CZ” Zhao’s attempts to have the lawsuit against them dismissed.
SEC Fights Back
The SEC has filed its opposition to a motion by Binance.US to dismiss the lawsuit. This latest development came to light through a court filing on the evening of November 7. The SEC has not only opposed the motion but has also requested that Judge Amy Berman Jackson issue a favourable order in support of the regulatory agency’s stance.
The heart of the SEC’s argument lies in its assertion that Binance.US should not be granted a dismissal of the lawsuit. They maintain that this denial is essential because of the alleged violations of securities laws, the Howey test, and investment contract rules.
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The SEC contends that Binance.US has engaged in illegally listing unregistered securities in the form of cryptocurrencies. Furthermore, they argue that the SEC’s attempt to regulate the cryptocurrency industry is not overreaching but rather a means of protecting investors under existing securities laws.
The SEC also takes issue with Binance.US’s handling of the situation. They claim that the company has delayed and failed to cooperate in connection with the earlier consent order, leading to disputes over document discovery and depositions.
Legal Battle Impact
This legal dispute between the SEC and Binance has drawn attention due to the recent setbacks the SEC experienced in its lawsuit against Ripple. Federal judges criticized the SEC’s approach as irrational, labelling it as “arbitrary and capricious.”
These developments have put a dent in the SEC’s credibility and cast a shadow of doubt over its legal actions in the cryptocurrency industry.
Meanwhile, the cryptocurrency market has witnessed an extension of gains following a recent recovery, with anticipation building around the potential approval of a spot Bitcoin ETF. Binance’s native token, BNB, has surged more than 10% within a week, with its price currently trading at $247. These developments suggest that the crypto market may be on the verge of a rally, adding an extra layer of complexity to the ongoing legal battles.