Binance Furies and Resists SEC: Lacks Foundation!

Binance maintains that its agreements with regulators do not affect securities laws. In this regard, the giant crypto exchange is challenging the jurisdiction of the SEC.

According to the exchange and its founder, SEC’s claim is baseless!

Binance, Binance.US and its founder Changpeng Zhao (CZ) have strongly disputed the allegations made by the US Securities and Exchange Commission (SEC). The SEC filed a lawsuit in June accusing the organizations of allowing the trading of unregistered securities. In response, Binance and CZ claim that they fail to meet the SEC’s ‘Howey Test’ standards. This test is considered a very important assessment in determining the legitimacy of an investment contract.

Binance and CZ say the SEC did not provide sufficient evidence of the existence of an investment contract. One of the main points they make is that platform users are not bound by any contracts after purchasing certain cryptocurrencies. They argue that for an investment contract to exist, there must be some degree of dependence on the efforts of others. In this case, they argue, the clients were not bound by any commitments that could qualify as investment contracts as required by the Howey Test.

Binance and CZ dispute SEC jurisdiction claims

The SEC cited U.S. Department of Justice (DOJ) settlement and consent orders that Binance signed with other regulatory agencies as evidence that it was aware of the exchange’s activities in the country. Binance and CZ argue that securities laws do not cover the SEC’s claims due to jurisdictional admissions made under the Bank Secrecy Act (BSA). Therefore, they deny these allegations.

According to Binance, settlements regarding the BSA and other regulatory matters do not affect securities laws. They argue that the SEC’s theory that crypto assets are securities under the Securities or Exchange Act lacks a solid foundation. This legal dispute has evolved into a complex battle of legal interpretations and regulatory jurisdictions. Binance and CZ’s legal team has consistently argued that the SEC’s allegations exceed the regulator’s authority. This echoes similar arguments Binance made earlier in the year when it sought to dismiss a separate lawsuit filed by the Commodity Futures Trading Commission (CFTC).

However, the SEC claims that it was aware of Binance’s activities in the US due to settlements and consent orders. According to the regulator, these agreements reveal that the exchange uses American infrastructure for transactions. It also shows that it is aggressively serving American customers.

BNB resilience amid legal challenges

Binance’s native token, Binance Coin (BNB), has proven to be quite resilient in navigating these legal issues. As you follow on Kriptokoin.com, the stock exchange reached an agreement with regulatory authorities for 4.3 billion dollars. However, BNB is still consistently reporting gains for its holders. In particular, its social dominance has increased since December 5, 2023. This indicator reflects the relevance and adoption of BNB among market participants. This indicator shows how much the public still cares and supports BNB. BNB has seen a decrease of 1.62% in the last 24 hours. However, the token gained over 9% on its weekly chart.