Binance, Binance.US and platform head Changpeng Zhao have filed motions to dismiss the lawsuits SEC, noting the regulator’s “implausible” arguments. CoinDesk reports this.
One of the documents said the agency had defined the term “investment contract” too broadly.
“The SEC has recently taken several enforcement actions, including this lawsuit, based on its new position that virtually all cryptoassets and virtually all transactions involving them are securities,” the company noted.
The petitions also made similar arguments regarding the so-called “substantial issues doctrine,” a Supreme Court ruling that directs federal agencies to await decisions by the U.S. Congress on major economic or political issues.
“Indeed, since 2019, Congress has considered more than a dozen proposals that would provide a consistent and workable framework for crypto assets and trading platforms. Despite this, the SEC is now seeking to expand its powers,” the crypto exchange’s lawyers emphasized.
On June 5, the SEC filed a lawsuit against Binance and Zhao, bringing 13 charges, including the sale of unregistered securities. On June 6, the regulator sent a request to freeze the digital assets of the American division of the exchange.
On June 9, users lost the ability to deposit dollars, which caused sales from those wishing to withdraw funds in fiat. Against this background, a discount has formed on the platform in Bitcoin quotes paired with the dollar – the figure reached ~$2200 (7.3%).
On June 17, the SEC and Binance entered into an agreement regarding client funds in the United States. The exchange resumed the withdrawal of assets, but the company warned that the situation could change.
The agency later accused Binance.US of being unwilling to cooperate. According to the regulator, the platform’s actions violate the agreements between the parties prohibiting the withdrawal of funds abroad.
According to the department, the holding company of the exchange, BAM, delayed the preparation of the requested documents. The court refused to oblige the US subsidiary of Binance to provide the SEC with expanded information regarding the processing of client assets. The company itself called the regulator’s requests “too broad” and “unreasonably burdensome.”
As a reminder, according to an internal exchange presentation, Binance.US’ growth opportunities are limited due to the business’s ties to Zhao and the current regulatory environment.
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