The Securities and Exchange Commission (SEC) has maintained its stance in a recent filing that Binance’s dismissal plea lacks legal substance. The filing on Wednesday was in response to the cryptocurrency exchange’s earlier attempt to discard the SEC lawsuit.
SEC Deems Binance Token Sale Illegal
The SEC is countering Binance’s motion to dismiss, asserting that the exchange’s defense is founded on misinterpretations of the law. According to the SEC the exchange’s argument would jeopardize long-established precedents vital to the functioning of the nation’s securities laws. They argue that Binance’s approach proposes a rigid framework alien to the existing legal system.
The SEC’s allegations point directly to Binance’s launch of the BNB token and Binance USD (BUSD), which the agency deems as infringements of securities law. Additionally, the SEC argues that the company’s staking and earning programs fall under securities violations. Moreover, the SEC refutes Binance’s reliance on the “Major Questions Doctrine,” a principle increasingly invoked by crypto firms in legal defenses.
Binance Battles SEC Over Legal Reach
Binance and its U.S. arm and founder Changpeng Zhao have argued that the SEC’s suit represents an overreach of its regulatory mandate. They hold that the agency must adequately demonstrate how its actions violate securities laws. However, the SEC has firmly rejected this notion, emphasizing their duty to enforce the legal frameworks set by Congress.
This legal tussle comes on the heels of the SEC’s consistent scrutiny of the cryptocurrency industry. The exchange’s defense challenges the SEC’s interpretation of their activities as violations, while SEC continues to argue for applying traditional securities law in the cryptocurrency sector.
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