Binance Challenges SEC's Amended Complaint

Crypto News Regulation

Written by Gode S.,

Web3 Market Analyst

Last Updated: November 05, 2024

Key Takeaways

Binance and its former CEO CZ have filed a motion to dismiss the SEC's revised lawsuit;
Binance's legal team argues that the SEC's view of crypto as investment contracts was previously rejected by the court and maintains that secondary market sales should not be classified as securities transactions;
The SEC asserts that most crypto transactions should be seen as securities deals due to potential value appreciation.

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Binance Challenges SEC's Amended Complaint

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Facing ongoing allegations from the US Securities and Exchange Commission (SEC), Binance $9.47B and its former CEO Changpeng Zhao have filed a motion to dismiss the regulator's amended lawsuit on November 4.

The SEC's amended lawsuit includes additional digital currencies like Filecoin FIL $1.65 , Cosmos ATOM $2.44 , The Sandbox SAND $0.1574 , Decentraland MANA $0.1675 , and Axie Infinity Shards AXS $1.13 .

Binance's attorneys argue that the court previously acted correctly by rejecting the SEC's initial attempt to label crypto assets as investment contracts.

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The SEC insists that virtually all transactions involving crypto are securities dealings because buyers might anticipate asset appreciation. Binance's counsel argues that this position is legally baseless and urges the court to dismiss the amended claims with prejudice, preventing any further revisions.

The defense team contends:

The SEC pays lip service to the Court's ruling that crypto assets are not in and of themselves "securities," but refuses to accept the logical conclusion of that ruling—that secondary market resales of the assets long after they were first distributed by their developers are not "securities" transactions.

These latest developments mark another episode in the judicial conflict between Binance and the SEC, which began when the regulator filed a lawsuit against the exchange in June 2023.

In other news, a 25-year-old from Alabama was arrested on October 17 for hacking the SEC's social media to post fake Bitcoin ETF approval news.