Binance and CZ Request Court to Dismiss SEC Lawsuit
Binance, the largest cryptocurrency exchange with over $50 billion in daily trading volume, along with its founder Changpeng Zhao (CZ), has requested the court to dismiss the ongoing lawsuit filed by the US SEC. Binance contends that the SEC has not adequately demonstrated how its complaint aligns with the Howey test, justified claims against third-party tokens, or validated its request for disgorgement to proceed to discovery.
In a filing submitted to the District Court of Columbia, Binance and CZ argued that the SEC failed to demonstrate each "particular transaction" qualifying as an investment contract under the Howey test. They noted the agency did not provide a clear method for distinguishing tokens sold as investment contracts from other commodities like Bitcoin BTC and Ethereum ETH.
Binance further claimed that the SEC has not sufficiently explained how the transactions violated the Exchange Act or classified token sales involving developers as investment contracts. The exchange asserted it was unfair for the SEC to target ten specific tokens among many without involving the developers of those tokens. Additionally, Binance stated that the SEC has not proven any financial harm caused by the exchange, which is necessary for pursuing disgorgement.
Binance vs SEC Lawsuit Dismissal Soon?
In a recent filing, Binance argued that the SEC also failed to prove that secondary sales of BNB on Binance.US were investment contracts. The exchange contended that the SEC's token-by-token analysis lacks sufficient evidence to support its claims.
Moreover, Binance stated that the SEC has not provided a clear framework to distinguish between securities and non-securities in the marketplace. The filing highlighted that no registration claims were made against Binance.US outside of secondary sales.
The exchange asserted that the SEC’s claims under the Exchange Act cannot proceed based solely on staking and maintained that Binance.US did not list securities.
Meanwhile, Binance's native BNB Coin experienced some upward movement but faced rejection at $700. Analysts suggest that following a convincing breakout past $700, the BNB coin could rally to $1,000.