Binance attempts to get SEC off his back.
A new legal filing has revealed that Binance, the world's leading cryptocurrency exchange, and its CEO Changpeng "CZ" Zhao are formally asking the United States District Court to dismiss the ongoing lawsuit from the US Securities and Exchange Commission (SEC).
The September 21st motion claims that the SEC has gone beyond its jurisdictional bounds in pursuing a lawsuit against the crypto exchange.
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In particular, in the filing, Binance claimed:
It is clear that the SEC’s lawsuit has no foundation in the currently enacted securities laws.
The 60-page motion further criticizes the SEC for its lack of clarity in governing the cryptocurrency sector before filing the lawsuit. Lawyers representing Binance and Zhao state:
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.
Moreover, the filing contends that the SEC's interpretation of securities laws as they apply to cryptocurrencies is flawed.
This motion by Binance and Zhao is paralleled by a separate 56-page filing from Binance.US, officially known as BAM Trading Services Inc. Binance.US has also requested the dismissal of charges laid against it.
The legal actions come in the wake of the SEC initiating a lawsuit against Binance and its related entities on June 5th, accusing them of operating illegally in the US and offering unregistered securities. This followed another regulatory action against Binance by the Commodity Futures Trading Commission (CFTC) just three months prior, claiming that the crypto exchange had violated several guidelines.
It is worth noting that SEC has also filed a similar lawsuit against crypto exchange Coinbase on June 6th. However, Coinbase was faster than Binance in filing a motion asking the court to dismiss SEC's lawsuit.
Binance and its CEO, Changpeng Zhao, are making a coordinated legal attempt to dismiss the SEC lawsuit against them. They argue that the SEC has retroactively imposed its authority on the cryptocurrency industry without offering clear guidelines. The motion's outcome could set a precedent for future legal interactions between crypto companies and US regulators.
