Binance and its former CEO Changpeng 'CZ' Zhao filed a motion to dismiss the SEC's amended complaint, highlighting the lack of clear regulatory standards for the crypto industry.
Binance and CZ's Statement
On November 4, Binance and its former CEO Changpeng 'CZ' Zhao filed a motion to dismiss the SEC's amended complaint, arguing it disregards previous court rulings that crypto assets are not inherently securities. Binance's legal team claims the SEC's approach contradicts these rulings, as the agency's assertions are based on market participants' expectations of profit from reselling tokens in secondary markets.
Binance's Legal Challenges
Legal challenges for Binance began in June 2023, when the SEC filed a lawsuit against Binance, Binance.US, and CZ, accusing them of operating unregistered exchanges. While the SEC secured a partial victory, Judge Amy Berman Jackson dismissed key allegations that BNB secondary market sales and BUSD-related programs constituted investment contracts. Nonetheless, the latest amended complaint aims to revive some previously dismissed claims.
Implications for the Crypto Market
The crypto exchange has faced various legal issues, including a separate case with the U.S. Department of Justice. In November 2023, Binance admitted to anti-money laundering violations, resulting in a $4.3 billion fine. CZ served four months in U.S. prison but has been released. Despite these challenges, Binance continues to navigate regulatory hurdles under the new leadership of CEO Richard Teng.
The current situation with Binance highlights the complexity of legal issues in the crypto industry. How the latest SEC complaint amendments will affect the market remains uncertain, but the need for clear regulation for all market participants is growing.
