Binance US Exchange, along with its CEO, Changpeng Zhao (CZ), have jointly taken a bold step by filing a motion requesting the dismissal of the lawsuit initiated by the United States Securities and Exchange Commission (SEC). They claimed the SEC has overstepped its boundaries and imposed retrospective regulations on the cryptocurrency sector.
As documented in their 60-page petition filed on September 21, claims that the SEC failed to provide clear regulatory guidelines for the crypto industry before launching its lawsuit against Binance. They claim that the SEC’s attempt to apply securities laws retroactively to cryptocurrency transactions dating back to July 2017 lacks a solid legal footing. The petition argues that the SEC’s lawsuit is fundamentally flawed and not in line with the current securities laws.
Adding to their case, Binance’s legal team accuses the SEC of misinterpreting securities laws, specifically in their application to cryptocurrencies. They argue that the SEC’s avocation of regulatory control over the crypto industry leads to a distortion of the text within existing securities laws.
Notably, Binance’s American branch, Binance US, is also seeking the dismissal of charges through a separate 56-page filing on the same day. The SEC had previously sued Binance and its affiliates on June 5, alleging the sale of unregistered securities and illegal operations within the United States.
This legal confrontation with the SEC follows a similar lawsuit from the Commodity Futures Trading Commission (CFTC), which accused Binance of failing to register and violating its regulations. Consequently, Binance US has witnessed a substantial decline in daily trading volumes, plunging more than 98% since September 2022, as reported by Todayq News. The ongoing regulatory actions have also resulted in a reduction in Binance US’s workforce, with its president and CEO, Brian Shroder, departing the firm on September 13.
The outcome of this legal battle will decide if the SEC can enforce securities laws on crypto assets retroactively, a pivotal moment for the cryptocurrency industry. Binance and its CEO’s motion for dismissal is eagerly awaited by industry stakeholders and enthusiasts.