Binance and CZ Push Back with New Motion to Dismiss SEC Lawsuit

In a bold move, Binance and its former CEO, Changpeng "CZ" Zhao, are pushing back against the U.S. Securities and Exchange Commission (SEC) with a new motion to dismiss the SEC’s amended lawsuit. The motion was filed after the SEC made changes to its original complaint last month. Now, Binance is asking the court to strike down some of the SEC’s requests.

At the heart of the dispute is whether crypto assets should be considered "securities." The SEC has argued that nearly all crypto transactions, including secondary market sales of tokens, should be treated as securities. 

However, Binance disagrees, pointing out that a court ruling already stated that crypto assets themselves aren’t automatically securities. In its filing, Binance argues that resales of these assets, long after they were first issued, shouldn’t be considered "securities transactions."

Binance's legal team says the SEC’s amended complaint continues to ignore this ruling and insists that nearly all transactions involving crypto assets, including secondary market resales, should be treated as securities—simply because some buyers hope the value of the tokens will increase.

The SEC had previously used the term "crypto asset securities" but recently clarified in a footnote that it wasn’t referring to the assets themselves as securities, though it still maintains that many crypto transactions are. 

Binance is now asking the court to strike requests for disgorgement (a type of penalty) against the company and CZ, as well as a request for injunctive relief (an order to stop certain activities).

This latest legal challenge comes after a ruling in June 2024, where U.S. District Judge Amy Berman Jackson dismissed several allegations in the SEC's original lawsuit against Binance. Those dismissed charges included issues related to Binance’s Simple Earn product and secondary sales of BNB tokens. However, the judge allowed most of the SEC’s case to move forward.

In response, the SEC has updated its complaint to address concerns raised by the judge. It has reintroduced charges about the sale of 10 cryptocurrencies Binance allegedly sold as unregistered securities, and is now focusing on the ongoing sales of BNB and Binance’s other products.

The SEC’s legal battle against Binance, CZ, and related companies began in June 2023. Since then, both sides have fought fiercely over whether certain cryptocurrencies should be regulated like traditional securities.

As the case continues, the crypto world is watching closely, as this lawsuit could set important precedents for how regulators treat digital assets moving forward.

Stay tuned - this legal showdown is far from over!

Disclaimer: This article is for informational purposes only and does not reflect the views or opinions of Crypto Accountants UK.
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