As a seasoned analyst with a decade of experience in the financial industry, I find myself closely watching this legal battle between Binance and the SEC unfold. The latest filing by Binance’s lawyers seems to be a well-prepared response to the SEC’s amended complaint. It is evident that they are leveraging the court’s previous ruling regarding crypto assets not being securities, which I believe could potentially weaken the SEC’s case.
In response to the updated lawsuit filed by the Securities and Exchange Commission (SEC) last month, lawyers for Binance and its ex-CEO Changpeng “CZ” Zhao have asked the court to throw out the case. This action is part of the ongoing legal dispute.
In a filing dated November 4th, Binance’s and CZ’s legal team assert that the Securities and Exchange Commission’s revised complaint merely pays lip service to the court’s earlier decision which does not classify crypto assets as securities. They contend that the SEC has failed to recognize how this ruling affects the trading of digital assets.
As per the court’s decision, since cryptocurrencies are not classified as securities, it implies that the secondary market sales of these digital assets do not constitute “securities” transactions from my perspective as an analyst.
In simpler terms, the revised lawsuit by the SEC maintains its position that most cryptocurrency trades, even resales of tokens on secondary markets without disclosure, are considered as securities transactions since some investors might anticipate these assets to appreciate in value, according to the legal team.
The filing also points out that the SEC’s amended complaint still lacks the legal basis that differentiates between assets and investment contracts, arguing that assets themselves do not count as investment contracts simply because they were offered to customers “as part of a package of promises and expectations.”
Additionally, it’s worth noting that the Securities and Exchange Commission (SEC) has yet to establish definitive guidelines for courts, parties involved in litigation, or market participants, making it unclear which digital asset transactions are considered investment contracts and which ones are not.
They assert that the SEC often appears to favor certain entities by deciding on “winners and losers seemingly at random,” citing a recent instance where a case concerning Ether transactions, classified as investment contracts, was dropped.
According to what the agency has acknowledged, their non-testing method isn’t capable of distinguishing between securities and Beanie Babies during initial court proceedings,” the attorneys stated.
The remainder of this text outlines the counter-arguments presented in response to charges made by the SEC concerning Binance and its CEO, Changpeng Zhao. The document concludes with a proposal for the SEC’s allegations against Binance and CZ to be dismissed, without leaving any possibility for amendments.
In September, the Securities and Exchange Commission (SEC) revised its lawsuit against Binance and CZ, asserting that they did not plan to classify cryptocurrencies and tokens as securities. The SEC clarified that it often uses the term “securities” as a simplified way to refer to different aspects of crypto transactions.
Ultimately, the SEC pledged to refer to digital assets as “security tokens” and expressed regret for any misunderstanding that arose from their earlier statements.
On June 5, 2023, the Securities and Exchange Commission (SEC) brought a legal action against Binance, its CEO (CZ), and associated entities due to alleged breaches of securities trading laws. The SEC claims this infraction is based on their recognition of the BNB token and the BUSD stablecoin as securities, as stated in a court document.
It’s not just Binance facing legal issues with the Securities and Exchange Commission (SEC) over their cryptocurrency operations being considered as securities. The SEC has also filed lawsuits against Coinbase and Ripple, claiming that these companies offered unregistered security tokens in their crypto asset businesses.
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2024-11-05 14:54