Binance & CZ Launch Counteroffensive Against SEC, Claim Insufficient Evidence & Overreach – Coinpedia Fintech News
Binance & CZ fight back against SEC lawsuit, challenging their authority.
They argue they haven’t violated securities laws, dispute product classifications, and question the SEC’s evidence.
Binance claims lack of personal jurisdiction against CZ, while Binance.US disputes the SEC’s notice and claims.
In a bold and strategic move, Binance, the global cryptocurrency exchange heavyweight, along with its former CEO, Changpeng Zhao (CZ), has launched a counteroffensive against the U.S. Securities and Exchange Commission (SEC).
Their joint plea to dismiss the lawsuit with prejudice signals a broader defense strategy challenging jurisdictional constraints, scrutinizing product classifications, and questioning the SEC’s authority in the crypto environment.
The Howey Test Standoff
Recent court filings reveal that Binance and CZ are taking the SEC head-on, challenging the regulatory body’s interpretation of the Howey Test. This critical factor determines whether a transaction qualifies as an investment contract under securities laws. The legal battle intensifies as Binance and CZ aim to debunk the SEC’s claims, contending that they lack substantial basis.
Lawyers for the exchange duo assert that the SEC’s sudden interest in the crypto industry, after years of relative inactivity, raises eyebrows.
Also Read: Binance Rejects Security Label for Assets, Challenges SEC’s Howey Test Failure
Binance.US Steps Into the Fray
Not to be outdone, Binance.US, a subsidiary of Binance, independently files a similar motion. Their argument hinges on the SEC’s failure to demonstrate that U.S. customers engaged in securities law violations or met the definition of an “investment contract.”
The motion questions the SEC’s lack of evidence supporting the classification of any products as securities, pushing back against accusations of fraudulent activities by Binance.US customers and equity investors.
Adding another layer to the legal drama, Binance raises concerns about the SEC’s failure to establish personal jurisdiction against Changpeng Zhao. Simultaneously, Binance.US contends that the SEC provided insufficient notice to warrant dismissal. The SEC, in response, opposes Binance.US’ request, asserting the validity of its claims under the Howey Test.
Read More: DOJ, SEC, and FinCEN Clamp Down on Binance: Is This the End of the Road?
It rejects accusations of overreaching, emphasizing its commitment to investor protection and criticizing Binance for characterizing its actions as procedurally improper.
This showdown is surely one to keep tabs on. Stay tuned to Coinpedia for all the updates!
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