SEC vs. Binance court showdown postponed to next week due to snowstorm
Binance’s Big Face-Off A trial with the Securities and Exchange Commission in D.C. District Court was postponed until next week after a massive snowstorm closed the courtroom on Friday.
The cryptocurrency exchange, which wants the SEC’s lawsuit dismissed, will now face the regulator on Monday at 10 a.m. ET. According to the order signed by Judge Amy Berman Jackson. Two to three inches of snow fell in the DC area overnight.
The SEC sued Binance Holdings Ltd. and its former CEO Changpeng Zhao. June, It accused the cryptocurrency exchange of lying to customers, failing to restrict U.S. investors from accessing Binance.com, misdirecting capital to segregated investment funds owned by Zhao, and operating as an unregistered exchange. The SEC also stated that 12 tokens on the exchange are securities, including BNB and BUSD.
Binance will argue that the SEC’s assessment of what constitutes a security is inaccurate, in part because no contracts are involved, and will argue that the leading question rule applies. This principle requires that agencies obtain explicit congressional approval to decide on matters of national importance.
“In the more than a decade since Bitcoin launched in 2009, the SEC has seen the growth of Binance.com and several other cryptocurrency platforms in prominence, allowing users to buy and sell cryptocurrency tokens without any indication that the SEC would later claim the industry as a whole. By standing still and allowing the selling, Binance told a court in December that it had “violated securities laws.” filing. “Unlike the CFTC, the SEC lacks legal authority over exchange sales of cryptocurrency assets.”
The SEC argued that the case should not be dismissed and that Binance intentionally failed to comply with federal law.
“Binance’s Chief Compliance Officer summarized the case crudely but succinctly, admitting that Binance was ‘operating as an unlicensed stock exchange in the United States,’” the SEC said in a November court filing. filing. “He was right. Now the defendants seek to avoid the repercussions of their actions by asking this court to dismantle decades of default precedent governing the nation’s securities laws.”
Zhao, also known as CZ, pleaded guilty late last year to anti-money laundering and sanctions violations after a years-long investigation by federal regulators. Binance agreed to pay $4.3 billion in one of the largest corporate settlements in history. Zhao agreed to pay a $50 million fine and stepped down from his position as CEO. Singapore industry veteran Richard Teng was subsequently appointed CEO.
Coinbase Hearing
The motion hearing scheduled for Friday would have been the second high-profile showdown involving the agency and cryptocurrency company this week.
Acquired by Coinbase and SEC. rotation He appeared in court Tuesday before New York District Judge Katherine Polk Failla. Coinbase was sued by the SEC in June Brokers and clearing houses, which are said to operate as unregistered exchanges, told the court that the tokens available on the exchanges were not securities.
Judge Failla asked the SEC a pointed question about how it defines securities. Concerns were expressed that collections like Beanie Babies may be too broad and generic.
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