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Binance And Changpeng “CZ” Zhao File To Dismiss US SEC Lawsuit: Court
Binance and founder Changpeng “CZ” Zhao have asked the court to dismiss the lawsuit by the US Securities and Exchange Commission (SEC). Binance claims the SEC has failed to show how its complaint satisfies the Howey test, why its complaint against third-party tokens to move ahead, and request for disgorgement should proceed to discovery.
Meanwhile, the crypto industry including Ripple CLO Stuart Alderoty fired back at the SEC. He said the agency again used failed arguments to oppose dismissal, including crypto holds no inherent value.
Binance Asks Court to Dismiss SEC Lawsuit
In the latest court filing in the District Court of Columbia, Binance and founder Changpeng “CZ” Zhao have urged the court to dismiss the lawsuit by the US SEC. Moreover, BinanceUS also filed in support of the motion to dismiss the SEC complaint.
The filings were ‘reply’ to the U.S. Securities and Exchange Commission’s opposition to drop the case. The leading crypto exchange and CZ argue that the agency failed to show that each “particular transaction” at issue was an investment contract under the Howey test. They also assert that the SEC failed to provide a reasonable way for the court to distinguish tokens sold as investment contracts from tokens sold as commodities such as Bitcoin (BTC) and Ether (ETH).
Exchange and Founder Changpeng Zhao’s Arguments
Binance said the SEC fails to show how its complaint satisfies the Howey test. It includes how the transactions at issue violate the Exchange Act and token sales involving developers were investment contracts.
Also, the agency did not explain why the case should proceed without the third-party tokens’ developers. The crypto exchange argued it was not necessary for the agency to target ten third-party tokens from many tokens.
Moreover, the filing claimed that the SEC has failed to reveal that a single investor suffered pecuniary harm, as required for the agency to seek disgorgement.
Thus, the defendants request the court to dismiss the SEC’s claims against Binance and Changpeng Zhao. Also, the SEC has failed to rectify flaws, including the court’s order on the agency’s pleading deficiencies.
BinanceUS Supports the Dismissal of SEC Lawsuit
The exchange argues that the government agency can not establish any secondary sales on Binance.US were investment contracts. Investors never had reasonable expectations of profits from the efforts of others.
Moreover, the token-by-token analysis shows the SEC’s allegations as insufficient. Also, the regulator failed to provide a framework, differentiating tokens in the marketplace that are securities and tokens that aren’t.
There were no registration claims against BinanceUS outside secondary sales, as per the filing. The SEC’s Exchange Act claims cannot move forward on the basis of staking alone. Binance arm concluded that it didn’t list securities and some counts of the first amended SEC lawsuit must be dismissed.
Meanwhile, BNB price has jumped 2% in the last 24 hours, with the price currently trading at $685.20. The token is expected to hit $800 after a recent bullish comment by CZ.
Varinder Singh
Varinder has over 10 years of experience in the Fintech sector, with over 5 years dedicated to blockchain, crypto, and Web3 developments. Being a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He is currently leading the news team to cover latest updates and developments in the crypto industry.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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