Binance Holdings and its CEO Changpeng Zhao (CZ) have filed a joint motion seeking to dismiss a lawsuit against them by the United States Securities and Exchange Commission (SEC).
Binance & CEO Seeks to Dismiss SEC Lawsuit
In a 60-page filing with the United States District Court for the District of Columbia, the global exchange and CEO claimed that the SEC had overstepped its authority in suing them.
Binance and CZ also accused the SEC of failing to provide clear regulatory guidelines for the crypto sector ahead of the lawsuit against them, thus imposing penalties retroactively.
“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 joint filing stated.
Furthermore, Binance and CZ accuse the SEC of misinterpreting the text of the securities laws as part of an effort to expand its jurisdiction into the crypto sector.
“In attempting to claim regulatory power over the crypto industry, the SEC distorts the text of the securities laws,” they said.
According to a Bloomberg report, Binance.US, the American arm of Binance Holdings, also filed a separate 56-page document seeking dismissal of the SEC lawsuit against it.
Legal Tussle
In June, the SEC filed a lawsuit against Binance Holdings, Binance.US, and CZ, accusing them of multiple violations, including operating illegally, mishandling customers’ funds, and offering unregistered securities. The defendants have since denied the SEC’s claims, resulting in a three-month legal tussle.
The ongoing case has severely impacted Binance.US’ business in recent months. According to recent data from Kaiko, the American exchange weekly trade volume has dropped from a yearly high of roughly $5 billion to just $40 million.
Binance.US recently laid off one-third of its workforce or over 100 staff while its CEO Brian Shroder stepped down as part of an effort to stay operational.
