Binance vs. SEC: Legal Clash Intensifies
In recent years, Binance, a prominent cryptocurrency exchange, has rapidly expanded its global presence, including in the United States. However, following the fallout of FTX and Alameda Research, which affected institutional investors and retail traders, Binance’s market share has come under threat due to regulatory scrutiny and intensified competition from rival exchanges.
https://t.co/hSHrrlF7o7 and Its Legal Team Allege SEC Issued Misleading Statements in Lawsuit https://t.co/mLKGneRSOu
— CZ 🔶 Binance (@cz_binance) June 22, 2023
Unregistered Securities Allegations
Currently, Binance is locked in a legal battle with the United States Securities and Exchange Commission (SEC) over allegations of listing unregistered securities and offerings. Nevertheless, Binance and its legal team vehemently deny the SEC’s claims, going as far as accusing SEC Chairman Gary Gensler of having a conflict of interest. Binance alleges that Gensler had previously sought an informal advisory role with the exchange before assuming his position as SEC chair.
Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, has accused Binance and its CEO Changepeng Zhao (CZ) of freely commingling users’ assets, thereby jeopardizing investor funds. Grewal emphasizes that imposing restrictions on Binance and CZ is crucial for safeguarding investor assets due to their control over customer assets and alleged ability to divert or commingle them.
Binance Counters SEC’s Claims
On June 5, the SEC initially filed thirteen charges against Zhao and Binance entities. Chairman Gensler stated that Binance and CZ were involved in an intricate web of deceit, conflicts of interest, inadequate disclosure, and deliberate evasion of the law. In response, Binance and its legal team filed a motion on June 21 in the US District Court for the District of Columbia, arguing that the SEC’s statements about the handling of customer assets were misleading. They assert that the SEC lacks evidence of asset commingling or diversion by the exchange.
If approved by the judge, the motion filed by Binance could restrain the SEC from making certain statements publicly, as Binance claims that these statements could cause confusion in the market. Furthermore, Binance argues that the SEC’s press release risks misinforming the public and potentially prejudicing the jury pool with distorted descriptions of the evidence against the defendants.
