The U.S. Securities and Exchange Commission (SEC) is suing the cryptocurrency exchange Binance and its CEO Changpeng Zhao (CZ). They have responded by filing a motion to dismiss the case. They argued: "In attempting to claim regulatory power over the crypto industry, the SEC distorts the text of the securities laws," saying: "It is clear that the SEC's lawsuit has no foundation in the currently enacted securities laws."
In an effort to dismiss the SEC lawsuit, Binance and CZ
On Thursday, the U.S. Securities and Exchange Commission (SEC) filed a complaint against cryptocurrency exchange Binance and its CEO Changpeng Zhao (CZ).
The lawyers representing Binance and Zhao allegedly stated in the court document: "The SEC's claims against BHL [Binance Holdings Ltd.] and Mr. Zhao should be dismissed with prejudice." They also said
It is obvious that the SEC's case is not supported by the securities laws that are currently in effect.
They further claimed that the SEC "distorts the text of the securities laws" by reading the term "contract" out of the statutory phrase "investment contract" in an effort to assert regulatory authority over the cryptocurrency business.
A further caution was issued by the legal counsel for the cryptocurrency exchange and its CEO: "The SEC also seeks to enlarge its jurisdiction globally to include transactions on foreign cryptocurrency platforms, defying supreme court precedent holding that the agency's regulatory authority ends at the U.S. border." The statement said, "As the SEC lacks authority to do this, BHL and Mr. Zhao respectfully move to dismiss the Complaint."
The legal team for Binance also argued:
The SEC's failure to give fair notice of its innovative interpretation of the securities rules results in the failure of the whole lawsuit.
The complaint fails to sufficiently establish that Mr. Zhao personally had the necessary suit-related contacts with the United States to justify an exercise of personal jurisdiction over him, among other shortcomings, according to Binance's legal team.
BAM Trading Services (doing business as Binance US) and BAM Management US Holdings are also attempting to have the SEC's accusations against them dismissed. On June 5, the SEC brought legal action against CZ and Binance businesses. The securities regulator classified 12 crypto tokens as securities in the case.
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