Binance is preparing for a legal battle against the US Securities and Exchange Commission (SEC), as the District Court for the District of Columbia determined that the SEC’s lawsuit will continue. The exchange is confident in its case after Judge Amy Berman Jackson dismissed several “key claims” in the lawsuit.
Binance is ready for a legal battle
The US branch of crypto exchange Binance is getting ready to face the SEC as the regulatory battle continues. In a X post, the exchange informed users that the court has decided that the SEC’s case will proceed.
As explained in the post, Binance US was established to serve US customers and to specifically comply with the country’s regulations and licensing. It maintains “1:1 reserves for all customer assets” and has robust compliance and risk programs to “ensure the safety, security, and integrity” of the platform.
Binance US releases public statement. source: Binance.US on X
The exchange criticized the SEC’s “regulation by enforcement approach” and “politically motivated” overbought decisions, a common criticism that political and industry figures have expressed. Binance US highlighted the “limited guidance” the SEC has offered to the industry to operate and comply with regulations.
Additionally, the crypto trading platform claimed that the US regulator has yet to identify “any evidence of wrongdoing” from the American branch during the extensive, 11-month discovery process in which Binance has participated.
Nevertheless, the exchange assured that it is prepared for the legal battle and looks forward to moving forward in the judicial process. It said that it is confident in its stance and is confident that the court will validate it at the appropriate time:
We remain confident in our position that the SEC's case is not supported by the facts or the law, and that the Commission does not have the authority it seeks to use to take action against us. We are confident that this position will be validated by the courts in due course.
Partial win for crypto exchange
In June 2023, the SEC filed a lawsuit against the crypto exchange, arguing that Binance US offered the sale of unregistered securities and operated illegally in the US. The exchange filed a motion to dismiss the lawsuit, alleging that the US regulator exceeded its legal authority.
On Friday, Judge Amy Berman Jackson ruled against the exchange’s attempt to dismiss most of the SEC’s claims. However, Binance did get a partial victory after Judge Jackson dismissed some of the regulator’s main claims.
Per PostThe exchange’s main conclusion is the dismissal of “key claims,” including claims related to secondary market sales of BNB tokens, classifying the Binance USD (BUSD) stablecoin as an investment contract and “claims that crypto tokens themselves are securities.”
The exchange believes that this Court decision “deals a blow to the SEC’s continued efforts to regulate through enforcement.” Furthermore, this decision marks a critical moment in the ongoing battle between regulators and the crypto industry.
This decision is more than just a legal victory for Binance; it recognizes that the SEC’s regulatory authority over the crypto industry has severe limitations. The Court rightly criticized the SEC’s decision to prosecute the billion-dollar industry through a “case-by-case, coin-by-coin, court-by-court” approach that produces inconsistent results and ambiguity.
Nevertheless, Judge Jackson allowed the lawsuit to proceed with claims related to the exchange’s staking program, the initial coin offering (ICO) sale of BNB, and anti-fraud violations of the Securities Act.
Binance Coin (BNB) is trading at $579.4 in the five-day chart. Source: BNBUSDT on TradingView
Featured image from Unsplash.com, Chart from TradingView.com
