Binance and SEC’s Legal Tussle
On September 21, Binance, under the leadership of CEO Changpeng Zhao, commonly known as CZ, took a stand against the US Securities and Exchange Commission. The company’s 60-page court petition alleges that the SEC has overreached its legal boundaries.
The SEC initially brought the lawsuit against Binance in June, accusing them of a slew of violations, including mismanaging customer funds and not adhering to securities rules.
Binance Boss Bites Back
In the court papers, Binance’s lawyers have been forthright. They state, “In attempting to claim regulatory power over the crypto industry, the SEC distorts the text of the securities laws.” They argue against the SEC’s attempt to extend its jurisdiction to encompass transactions on overseas cryptocurrency platforms.
Additionally, a move has been made to dismiss the charges against Binance.US, or BAM Trading Services. The implications of the lawsuit have had significant consequences for the US branch of the crypto giant. Some speculate this to be the primary goal of SEC chair, Gary Gensler.
Yet, not all battles have been lost. Binance recently scored a win against the SEC on September 19, with the federal court turning down the SEC’s request to examine Binance.US’s software.
Dueling Regulatory Claims
The irony of Binance’s situation hasn’t been lost on observers. Notably, attorney Jeremy Hogan points out the contradictory stances of two regulatory bodies. While the CFTC deems Binance’s stablecoin BUSD a commodity, the SEC calls it a security. Hogan jestingly remarks on the scenario, “Now, if FinCen files suit and alleges BUSD is a currency, Binance will have achieved the Holy Trifecta!”
Binance’s native cryptocurrency, BNB, has been experiencing market tremors. With a 1.5% decline on the day, BNB was trading at $211 at press time.
Since the SEC lawsuit in June, the coin has lost nearly a third of its value. From its peak in May 2021, the coin has seen a staggering 70% decline. Yet, BNB still shows resilience when compared to many DeFi tokens, most of which have taken even more significant hits in the current bear market.