The SEC amended its complaint against the cryptocurrency company, which continues to fight back
Binance and its former CEO, Changpeng “CZ” Zhao, are pushing back against the US Securities and Exchange Commission (SEC) in an ongoing legal case, challenging new claims that add more tokens to the list of alleged securities violations.
On November 4, Binance’s legal team filed a motion requesting the court dismiss the SEC’s amended complaint, which accuses the crypto exchange of securities law violations involving additional tokens, such as Axie Infinity Shards (AXS), Filecoin (FIL), Cosmos’ ATOM, The Sandbox’s SAND, and Decentraland’s MANA.
In the motion, Binance’s lawyers argue that the SEC’s amended complaint is legally flawed and misinterprets the court’s earlier ruling. They assert that the court has already differentiated between crypto assets and securities, emphasizing that merely selling a crypto asset does not inherently classify it as a security. According to Binance’s team, each transaction involving a crypto asset must be independently examined to determine if it meets the criteria of a securities transaction.
One of the central issues in Binance’s defense is the concept of “blind transactions,” where tokens are sold on secondary markets with no direct link to the original issuer. The SEC argues that these transactions still qualify as securities sales because some buyers may expect the token’s value to rise over time.
However, Binance’s legal team counters that these secondary sales should not automatically be treated as securities transactions. These often occur without any specific contractual promise of profit or involvement from the token’s original developers.
Binance’s lawyers argue that the SEC’s claims “fail as a matter of law” and should be dismissed entirely, without any opportunity for further amendments. They criticize the SEC’s approach as inconsistent with existing legal principles, claiming that it unfairly labels nearly all crypto transactions as securities-related due to the mere possibility of profit expectations among buyers.
This motion to dismiss reflects Binance’s broader strategy of contesting the SEC’s interpretation of crypto transactions, particularly as it pertains to secondary market sales. By filing for dismissal, Binance hopes to establish a precedent that crypto assets, when sold independently on the open market, are not inherently bound by securities laws.
Emma Rodriguez is the Proofreader at the Big Blind, with seven years of experience and five years in online gambling. She plays a crucial role in maintaining content quality by ensuring error-free, reader-friendly information about the gambling industry.
