Legal Move: Binance and U.S. Affiliate Seek Dismissal of SEC Lawsuit
Binance, Binance.US, and Changpeng Zhao have filed requests for the dismissal of the lawsuit brought forth by the Securities and Exchange Commission (SEC) on Thursday. They argue that the SEC has not presented credible claims of various securities-related violations. Furthermore, they contend that the SEC is seeking to expand its jurisdiction to cover digital assets, an area that Congress has not explicitly addressed in legislation.
The SEC's legal action, initiated in June, alleged that Binance, Zhao, and Binance.US illicitly listed unregistered securities in the form of various cryptocurrencies for trading and investment by U.S. investors. This legal dispute promptly raised questions about who holds access to customer funds on Binance.US. In their filings on Thursday, legal representatives for Binance and Binance.US stated that the SEC's accusations of securities law breaches were excessive.
One of the filings highlighted that the SEC has recently launched multiple enforcement actions, including this case, based on its new position that nearly all crypto assets and transactions involving them should be treated as securities. They argued that the SEC's interpretation of the term "investment contract" was too broad.
Both filings also underscored the significance of the "major questions doctrine," a precedent established by the Supreme Court. This doctrine advises federal agencies to defer to Congressional authority on matters of substantial economic or political importance.
This argument has led to division in the courts, with some judges suggesting that Congress should provide clarity on the regulatory status of digital assets, while others believe that crypto doesn't hold enough significance to fall under this doctrine. Although the House Financial Services Committee has advanced several bills specifically related to crypto for a full House vote, it remains uncertain whether they will progress through the Senate.
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