Binance, Binance.US, and CZ Seek Dismissal of SEC Lawsuit
Binance Holdings and former CEO Changpeng “CZ” Zhao have jointly filed a motion requesting the court to dismiss the U.S. Securities and Exchange Commission (SEC) lawsuit with prejudice, citing the lack of plausible allegations regarding investment contract and securities violations.
Binance’s subsidiary, Binance.US, has also submitted a similar filing, urging the court to grant the motion to dismiss. The basis for their request is the SEC’s failure to convincingly allege any violations related to investment contracts and securities laws.
Dismissal of SEC Lawsuit
On December 12, in response to the SEC’s opposition to the motion to dismiss, Binance, Binance.US, and CZ filed their reply. The SEC, in its opposition, presented a contorted interpretation of the Howey Test, asserting that any investment, with or without an investment contract, falls under securities laws.
The legal representatives for Binance and CZ are specifically requesting the court to dismiss the SEC’s claims with prejudice. They argue that the SEC, after years of staying on the sidelines, is now seeking authority over the crypto industry without Congress’ authorization.
- The SEC fails to plausibly allege any token, BNB vault, or simple earn as a security.
- The time-barred claim is made regarding the BNB offering.
- The SEC’s arguments impermissibly extend the securities laws overseas.
- The SEC failed to allege personal jurisdiction against Changpeng Zhao and didn’t provide fair notice compelling dismissal.
Simultaneously, Binance.US argues that the SEC has not successfully alleged that any products are securities. Additionally, the SEC has not presented any claims of fraud against Binance.US customers and equity investors.
SEC’s Response
The SEC opposed Binance.US’ motion to dismiss the lawsuit, countering the defendants’ claim of violations under the Howey Test. The SEC also refused to accept overreaching to regulate the crypto industry, asserting its history of protecting investors under existing securities laws for decades.
Meanwhile, Binance argued that the SEC was being procedurally improper and impermissible in attempting to introduce the findings of the $4.3 billion guilty plea and settlement agreement with the DOJ to this lawsuit.
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