Binance asked to dismiss the SEC’s claim

Lawyers for Binance, a prominent cryptocurrency exchange, urged a judge to dismiss a lawsuit filed by the US Securities and Exchange Commission (SEC). During a January 22 hearing in the United States District Court for the District of Columbia, Binance’s legal team presented its case, focusing on the treatment of certain tokens as securities under current regulatory and legal frameworks.

A Reuters report detailed Binance’s defense strategy, noting that an exchange lawyer accused the SEC of taking a contradictory stance toward cryptocurrencies. It was argued that while the SEC encouraged companies in the sector to register, it at the same time prevented them from any viable avenue to do so.

During the hearing, it was reported that the SEC defended the clarity of Howey’s test to determine whether an asset qualifies as a value, also applicable to cryptocurrencies. To this, Judge Amy Berman Jackson expressed her doubts, asking where the line was drawn in the SEC’s interpretation of digital assets as securities.

This case between the SEC and Binance could set a significant precedent for cryptocurrency companies in the United States. Many of these companies have criticized the lack of a clear regulatory framework, which has triggered compliance actions against several, including Binance, Coinbase, Ripple and Kraken.

In a related context, Binance, Binance.US and former CEO Changpeng Zhao reached an agreement in November 2023 with several U.S. government entities, including the Department of Justice and the Commodity Futures Trading Commission, for an amount of $4.3 billion. As part of the settlement, Zhao pleaded guilty to a serious charge and is expected to be sentenced on February 23.

The January 22 hearing, originally scheduled for January 19, was postponed due to adverse weather conditions. So far, Binance’s legal team has not offered further statements on the case.

K. Tovar

Source: Reuters

(Reference image source: Kanchanara, Unsplash)

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