The cryptocurrency exchange is going to have to respond to allegations it illegally sold securities
The simmering legal dispute between Binance.US, the American arm of cryptocurrency giant Binance, and the Securities and Exchange Commission (SEC) has reached a boiling point. Binance.US is bracing for a lengthy legal battle after a US court ruling allowed the SEC’s case against the company to proceed.
On Friday, the Court decided that the SEC’s case against https://t.co/AZwoBOh0gq will continue. We were prepared for this and look forward to having this case move forward in the judicial process.https://t.co/AZwoBOh0gq was established with the express purpose of serving United…
— Binance.US 🇺🇸 (@BinanceUS) July 1, 2024
The SEC’s accusations center on alleged violations of securities laws. It claims that Binance.US offered unregistered investment products and committed anti-fraud breaches. Binance.US, for its part, vehemently denies these claims, asserting its commitment to US regulations. It emphasizes its adherence to 1:1 reserves for customer assets and the robust compliance and risk programs implemented to ensure platform security.
However, tensions escalate as Binance.US criticizes the SEC’s regulatory approach, labeling it “regulation by enforcement.” It further suggests these legal challenges stem from politically motivated actions by the current SEC leadership under Chair Gary Gensler, an allegation that carries weight based on Gensler’s own comments and other enforcement actions.
Despite these accusations, Binance.US maintains confidence in its legal position. They argue that after an extensive 11-month discovery process, the SEC has yet to uncover any evidence of wrongdoing by Binance.US. The firm believes the SEC’s case lacks factual and legal merit.
However, a recent court filing paints a different picture. On June 28, a US court rejected Binance.US’s attempt to dismiss most of the SEC’s claims. Notably, the SEC’s allegation that Binance CEO Changpeng “CZ” Zhao acted as a “control person” for Binance.US remains in play.
