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On Friday, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia ruled that most of a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance, the world’s largest cryptocurrency exchange, can proceed. This decision comes despite Binance’s efforts to stop the case, raising important questions about the exchange’s future.
Binance Ready To Fight SEC
In response to the ruling, Binance.US expressed its readiness for the court’s decision. The company emphasized its cooperation throughout the 11-month discovery process, during which the SEC has not identified any evidence of wrongdoing.
In a tweet, Binance.US stated, “We remain confident in our position that the SEC’s case is unsupported by the facts or the law and that the Commission lacks the very authority it is seeking to display in bringing its action against us.”
The company even stated that it has always tried to follow the limited rules provided by the SEC. Furthermore, Binance noted the unfortunate reality of many crypto companies falling victim to what they see as the SEC’s politically driven actions under its current leadership.
SEC Accusations of Fraud
The SEC’s lawsuit, filed in June 2023, accuses Binance and Zhao of serious offenses, including inflating trading volumes, diverting customer funds, not blocking U.S. customers from its platform, and misleading investors about its market controls. Additionally, the SEC claims that Binance allowed the trading of unregistered securities, adding to its legal problems.
This ruling comes after Binance recently agreed to pay $4.3 billion to settle charges with the Department of Justice and the Commodity Futures Trading Commission over illegal finance breaches.
Similar allegations have been directed at other major crypto exchanges such as Coinbase, Kraken, Consensys, and MetaMask, indicating a broad regulatory crackdown on the cryptocurrency industry.
Partial Victory for Binance
Despite the setback, the ruling is not all bad for Binance or the wider cryptocurrency community. Judge Jackson agreed with a previous judge, stating that the SEC had not shown that secondary sales of Binance’s tokens by third parties on exchanges were securities. This part of the ruling is seen as a partial win for Binance and the crypto community.
However, the charges that will continue include Binance’s initial coin offering (ICO), the ongoing sales of Binance Coin (BNB), BNB Vault, staking services, failure to register as a securities platform and related fraud claims.
This decision comes despite Binance’s efforts to dismiss the case, raising critical questions about the future of the exchange and its operations.