Binance and Changpeng Zhao Seek Dismissal of SEC Lawsuit, Citing Regulatory Overreach

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Binance has been in a legal battle with SEC since June Related articles

Binance Holdings and its CEO, Changpeng Zhao, requested the dismissal of a lawsuit filed against them by the Securities and Exchange Commission (SEC), arguing that the regulator had overstepped its authority.

In a Movement of 60 pages Zhao and his exchange, filed on September 21, called the SEC’s lawsuit a retroactive attempt to use its regulatory power against them after failing to implement necessary guidelines.

The legal battle between Binance and the SEC is not over yet. Recently, CEO Chanpgeng Zhao asked the court to dismiss the SEC lawsuit.
Binance Holdings, its US counterpart and CEO Changpeng Zhao, have filed motions to dismiss the lawsuit against them by the Securities. pic.twitter.com/gBtxkqVn6Z

— VK.BNB (@TheHongVan68) September 22, 2023

The filing said that SEC Chairman Gary Gensler had publicly acknowledged in 2021 that there was no “regulatory framework” for crypto exchanges under the SEC’s authority and that “only Congress” could grant that authority.

It states that the SEC suddenly changed course last year when it began claiming that virtually all crypto assets are securities under its authority.

“The SEC is pursuing these new theories retroactively and seeking to impose liability for crypto asset sales that occurred as early as July 2017, before the SEC issued any public guidance on cryptocurrency,” the report said. “It is clear that the SEC’s lawsuit has no basis in currently enacted securities laws.”

Attorneys for Binance and Zhao also accused the SEC of fundamentally misunderstanding securities regulations and how they apply to digital assets, challenging the SEC’s argument that digital assets are securities.

Binance has been in a legal battle with SEC since June

Binance.US, the exchange’s U.S. division, has also filed to dismiss another lawsuit, again arguing that the SEC’s case has no basis under current securities laws, Bloomberg reported.

In both filings, the defendants also raised the “big questions doctrine,” a Supreme Court decision that ordered federal agencies to wait for Congress’ authority on economic or political matters.

The exchange and its CEO have been locked in a legal battle with the SEC since June, when the authority charged them with mishandling customer money, misleading investors and regulators and selling unregistered securities.

The lawsuits have put severe pressure on the exchange’s US operations and prompted an exodus of top executives around the world. Binance.US has also laid off 30% of its employees to weather a drop in trading volume.

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