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The American division of the Binance cryptocurrency exchange, Binance.US, is preparing for a new fight with American regulators.
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Binance.US released a statement declaring its readiness to continue to fight the U.S. Securities and Exchange Commission (SEC). The platform team recalled that the court ruled that the regulator’s case against Binance.US will be continued.
“We were prepared for this and look forward to having this case move forward in the judicial process.”
Binance.US statement
The team reminded that Binance.US was founded to serve clients according to U.S. rules and regulations. Additionally, the platform claims to have used the SEC’s limited guidance to the industry to conduct business in compliance.
“We, like many companies in our industry, have fallen victim to the SEC’s regulation by enforcement approach and politically motivated overreach under its current leadership.”
Binance.US statement
Binance.US emphasized that the SEC has yet to identify any evidence of wrongdoing by the exchange during its 11-month process. Therefore, the SEC’s case must be supported by the facts or the law, and the Commission needs more authority to bring a claim.
“Our business is on strong footing, and our commitment to giving Americans access to digital assets remains unchanged. The fight continues.”
Binance.US statement
U.S. court allows SEC to continue case against Binance
On June 28, the U.S. court rejected Binance’s motion to dismiss the SEC case on most counts. The exchange failed to convince a U.S. court to dismiss most of the charges brought against it by the SEC.
Judge Amy Berman Jackson granted the exchange’s request to withdraw the regulator’s claims regarding secondary sales of the BNB token, the BUSD stablecoin offering, and the Simple Earn product. The SEC’s investigation will continue into the ICO and subsequent sales of the BNB platform, the BNB Vault program, failure to register, and failure to comply with anti-fraud regulations. The same goes for the staking service on Binance.
Additionally, SEC charges against former Binance CEO Changpeng Zhao remain in force. The regulator argues that it acted as a “controlling person” and that the trading platform was required to register under the Exchange Act.
What the experts say
Despite the court’s decision, lawyer Scott Johnson called Berman Jackson’s ruling a “big defeat” for the regulator.
Wow, big loss for the SEC in Binance re: secondary sales. I was expecting this type of analysis from Failla, but Berman seems to have given it instead. pic.twitter.com/5vPPew4WLl
— Scott Johnsson (@SGJohnsson) June 29, 2024
Fox Business journalist Eleanor Terrett expects that lawyers from Coinbase, Kraken, and Consensys will use the latest decision in the SEC case against Binance. This will significantly strengthen their position in litigation initiated by the regulator.
You can fully expect @coinbase, @krakenfx and @Consensys lawyers to use this opinion to bolster their positions in their own litigations.
— Eleanor Terrett (@EleanorTerrett) June 29, 2024
And the @SECGov lawyers can no longer argue that the @Ripple ruling was merely an outlier that no other judges agree with. https://t.co/xC4VOtJvOX
Binance’s legal proceedings with American regulators
On June 5, 2023, the SEC filed a lawsuit against Binance, Zhao, and several affiliated companies for violating securities trading regulations. It follows from the court document that the Commission recognized the BNB token and the BUSD stablecoin, which bears the exchange’s brand, as securities.
Binance emphasized its intention to defend itself against the SEC’s charges. The exchange blames the agency for the lack of productive interaction and failure to provide clarity and guidance to the digital assets sector.
However, in November 2023, Binance settled the claims of the U.S. Department of Justice (DOJ) regarding violation of the sanctions regime and money laundering, agreeing to pay $4.3 billion. The fine for Zhao personally amounted to $50 million.
In December 2023, the regulator published a series of documents containing, among other things, previously undisclosed evidence and admissions of guilt by the trading platform. The SEC took notice and stated that it plans to continue legal proceedings against Binance despite the settlement with the DOJ.
According to regulator representatives, the federal court should consider all statements and admissions made by the exchange and Zhao on Nov. 21, 2023. For example, in an agreement with the DOJ, the crypto exchange admitted that it knowingly violated the law. However, in the SEC case, the platform argued that the Commission never notified it of non-compliance with the securities regulations.
How the lawsuit against Binance affected the crypto market
Legal problems have affected Binance’s market position. Binance claims the SEC is overreacting, and its former CEO, Zhao, defends the company’s practices. However, the cryptocurrency market remains cautious as it watches these legal proceedings unfold.
SEC continues to take enforcement action against crypto firms. SEC Chairman Gary Gensler argues that most digital assets are unregistered securities and that the regulator is committed to regulating the industry.
This ongoing lawsuit against Binance is part of a broader crackdown on the crypto industry. As the lawsuit continues, its outcome will likely have severe consequences for Binance and the wider cryptocurrency market.