The US arm of cryptocurrency exchange Binance.US is preparing for a new battle with US regulators.
Binance.US released Binance.US issued a statement announcing its readiness to continue fighting the US Securities and Exchange Commission (SEC). The platform team stated that the court ruled that the regulator’s case against Binance.US would continue.
“We were prepared for this and look forward to moving this case forward in the judicial process.”
Binance.US Statement
The team reminded that Binance.US was established to serve customers in accordance with US rules and regulations. In addition, the platform claims to have used the industry’s limited Securities and Exchange Commission guidelines to conduct business in accordance with the rules.
“We, like many companies in our industry, have fallen victim to the SEC’s regulatory-by-enforcement approach and politically motivated overreach under its current leadership.”
Binance.US Statement
Binance.US confirmed that the SEC has yet to find any evidence of wrongdoing by the exchange during the 11-month process. Therefore, the SEC’s case must be supported by facts or law, and the commission needs more authority to make a claim.
“Our business is built on solid foundations, and our commitment to giving Americans access to digital assets remains unchanged. The fight continues.”
Binance.US Statement
US Court Allows SEC to Continue Case Against Binance
On June 28, the US court denied Binance’s request to dismiss the SEC’s case on most counts. The exchange failed to convince a US court to dismiss most of the charges brought against it by the SEC.
Judge Amy Berman Jackson granted the exchange’s request to withdraw the regulator’s claims regarding the secondary sale of the BNB token, the BUSD stablecoin offering, and the Simple Earn product. The SEC’s investigation into the ICO and subsequent sales of the BNB platform, the BNB Vault program, failure to register, and failure to comply with anti-fraud regulations will continue. The same applies to Binance’s custodial service.
In addition, the SEC’s charges against former Binance CEO Changpeng Zhao are still active. The regulator claims that she acted as a “controlling person” and that the trading platform was required to register under the Exchange Act.
What the experts say
Despite the court’s decision, attorney Scott Johnson called Berman Jackson’s ruling a “major defeat” for the regulator.
Fox Business journalist Eleanor Terrett expects lawyers from Coinbase, Kraken, and Consensys to use the recent ruling in the SEC’s case against Binance. This would significantly strengthen their position in the lawsuits initiated by the regulator.
Binance’s Legal Action with US Regulators
On June 5, 2023, the SEC filed a lawsuit against Binance, Zhao, and several affiliates for violating securities trading rules. The court filing states that the SEC recognized BNB and the exchange’s branded stablecoin BUSD as securities.
Binance has confirmed its intention to defend itself against the SEC’s allegations. The exchange blames the SEC for a lack of constructive engagement and failure to provide clarity and guidance to the digital asset sector.
However, in November 2023, Binance reached a settlement with the US Department of Justice over sanctions violations and money laundering, agreeing to pay $4.3 billion. The fine imposed on Zhao personally was $50 million.
In December 2023, the regulator published a series of documents containing, among other things, previously undisclosed evidence and admissions of guilt by the trading platform. The SEC took note of this and stated that it plans to continue legal action against Binance despite the settlement with the DOJ.
According to representatives of the regulatory body, the federal court must consider all the statements and admissions made by the exchange and Zhao on November 21, 2023. For example, in an agreement with the Department of Justice, the cryptocurrency exchange admitted that it knowingly violated the law. However, in the SEC case, the platform claimed that the commission never notified it of its non-compliance with securities regulations.
How the Binance Lawsuit Impacted the Cryptocurrency Market
Legal troubles have affected Binance’s position in the market. Binance claims that the SEC is overreacting, and its former CEO, Zhao, defends the company’s practices. However, the cryptocurrency market remains cautious as it watches these legal proceedings unfold.
The Securities and Exchange Commission continues to take enforcement action against cryptocurrency companies. SEC Chairman Gary Gensler claims that most digital assets are unregistered securities and that the regulator is committed to regulating the industry.
This ongoing lawsuit against Binance is part of a broader campaign against the cryptocurrency industry. As the lawsuit continues, its outcome is likely to have significant consequences for Binance and the broader cryptocurrency market.