The legal drama between the U.S. SEC and global cryptocurrency titan Binance may end soon. Recent developments indicate a steadfast stance from the federal watchdog. A recent court filing from the SEC directly challenges the motion presented by Binance to dismiss an ongoing lawsuit. It pinpoints what it claims are inaccuracies and misinterpretations of the current laws and prior rulings.
Binance Has Many Legal Hurdles: A Closer Look
Earlier this summer, Binance found itself in the SEC’s crosshairs. It faces allegations that it had offered unregistered securities to investors. Those claims parallel a similar suit against Coinbase. The crux of Binance’s defense lies in its assertion that the SEC is overstepping its boundaries. Moreover, it claims that the commission has not sufficiently demonstrated any breaches of securities law.
The SEC’s latest filing is a rebuff to Binance’s dismissal motion. The agency suggests that Binance raises arguments that would unravel long-standing legal precedents essential to the nation’s securities regulations. Furthermore, the SEC contends that this would pave the way for an unfounded, inflexible legal framework that does not align with established case law or statutory provisions.
The Allegations: ICOs and Securities Law
Central to the SEC’s argument is the accusation that Binance’s initial coin offering (ICO) of its native BNB token. It was aimed at raising funds and violated securities law. The same applies to its dealings with Binance USD (BUSD), which the SEC deems an investment contract. If the judge agrees, it would put those within their purview. Further, the SEC asserts that Binance’s staking and earn programs violate federal securities laws.
The SEC’s document also addresses Binance’s invocation of the “Major Questions Doctrine.” That is a principle recently cited in numerous crypto-related legal defenses. The SEC argues that this doctrine, which emphasizes safeguarding Congressional power to make significant policy choices, should not impede the enforcement of securities laws as determined by Congress.