Binance.US Prepares for Continued Battle with the SEC
The American division of the Binance cryptocurrency exchange, Binance.US, is gearing up for a renewed confrontation with American regulators. Binance.US recently issued a statement expressing its readiness to continue fighting the U.S. Securities and Exchange Commission (SEC). The platform team noted that the court ruled in favor of continuing the regulator’s case against Binance.US.
Binance.US emphasized its foundation on serving clients in accordance with U.S. rules and regulations. The platform also claims to have operated within the SEC’s limited guidance to ensure compliance.
The exchange highlighted that the SEC has yet to provide any evidence of wrongdoing during its 11-month investigation. Consequently, the SEC’s case must be backed by facts or law, and the Commission needs more authority to substantiate its claims.
U.S. Court Allows SEC to Continue Case Against Binance
On June 28, a U.S. court rejected Binance’s motion to dismiss most of the SEC’s charges. Judge Amy Berman Jackson granted the exchange’s request to withdraw the regulator’s claims concerning secondary sales of the BNB token, the BUSD stablecoin offering, and the Simple Earn product. However, the SEC’s investigation will continue into:
- The ICO and subsequent sales of the BNB platform
- The BNB Vault program
- Failure to register
- Failure to comply with anti-fraud regulations
- The staking service on Binance
Additionally, SEC charges against former Binance CEO Changpeng Zhao remain in force. The regulator argues that Zhao 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, lawyer Scott Johnson described Berman Jackson’s ruling as a “big defeat” for the regulator. Fox Business journalist Eleanor Terrett anticipates that lawyers from Coinbase, Kraken, and Consensys will leverage the latest decision in the SEC case against Binance, significantly strengthening their position in litigation initiated by the regulator.
Binance’s Legal Proceedings with American Regulators
On June 5, 2023, the SEC filed a lawsuit against Binance, Zhao, and several affiliated companies for violating securities trading regulations. The court document indicated that the Commission recognized the BNB token and the BUSD stablecoin, which bears the exchange’s brand, as securities.
Binance has expressed its intention to defend itself against the SEC’s charges, accusing the agency of a lack of productive interaction and failure to provide clarity and guidance to the digital assets sector. In November 2023, Binance settled claims with the U.S. Department of Justice (DOJ) regarding violations of the sanctions regime and money laundering, agreeing to pay $4.3 billion. Zhao personally was fined $50 million.
In December 2023, the regulator published a series of documents containing previously undisclosed evidence and admissions of guilt by the trading platform. The SEC noted these admissions and stated its intention to continue legal proceedings against Binance despite the settlement with the DOJ. The federal court should consider all statements and admissions made by the exchange and Zhao on November 21, 2023. For example, in an agreement with the DOJ, the crypto exchange admitted to knowingly violating the law. However, in the SEC case, the platform argued that the Commission never notified it of non-compliance with securities regulations.
How the Lawsuit Against Binance Affected the Crypto Market
Legal challenges have impacted Binance’s market position. Binance argues that the SEC is overreacting, and its former CEO, Zhao, defends the company’s practices. However, the cryptocurrency market remains cautious as it observes these legal proceedings.
The SEC continues to take enforcement action against crypto firms, with SEC Chairman Gary Gensler asserting 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 crackdown on the crypto industry. As the lawsuit progresses, its outcome will likely have significant consequences for Binance and the wider cryptocurrency market.
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