On Sept. 21, the company submitted a 60-page petition asserting that the financial regulator overstepped its authority when it sued them.
The SEC sued Binance in June, alleging a range of misdemeanors, including mishandling customer funds, misleading investors and regulators, and violating securities rules.
Binance and CZ have accused the SEC of “attempting to impose penalties retroactively, before it provided any public guidance regarding cryptocurrencies,” according to Bloomberg.
Binance Boss Bites Back
According to the court filing, Binance lawyers wrote:
“In attempting to claim regulatory power over the crypto industry, the SEC distorts the text of the securities laws.”
The SEC also seeks to “enlarge its jurisdiction globally to include transactions on foreign cryptocurrency platforms,” it read.
A separate filing sought to dismiss the lawsuit against Binance.US, legally known as BAM Trading Services. The US division of the world’s largest crypto exchange has been virtually obliterated by the move, which may have been SEC chair Gary Gensler’s original aim.
Nevertheless, Binance scored a minor victory against the regulator earlier this week.
On Sept. 19, the SEC failed to convince a federal judge to immediately let its officials delve into Binance.US’s software.
The magistrate judge said he wasn’t “inclined to allow the inspection at this time.” He said the SEC should come up with more tailored requests and speak with additional witnesses instead.
Attorney Jeremy Hogan saw the irony in what has unfolded with Binance this year. The company has been sued by both the Commodity Futures Trading Commission (CFTC) and the SEC.
One agency alleges the Binance stablecoin BUSD is a commodity and the other claims it is a security. Hogan commented on the premise of another lawsuit being slapped on the firm:
“Now, if FinCen files suit and alleges BUSD is a currency, Binance will have achieved the Holy Trifecta!”
Did you know that the CFTC sued Binance in March, alleging that BUSD is a commodity?
And then, just 3 months later, the SEC sued Binance, alleging BUSD is a security?
Now, if FinCen files suit and alleges BUSD is a currency, Binance will have achieved the Holy Trifecta! SMH. https://t.co/WevWtWvMpi pic.twitter.com/b7ioB9qCB7
— Jeremy Hogan (@attorneyjeremy1) September 22, 2023
The Binance native token, BNB, remains on shaky ground, having dropped 1.5% on the day. As a result, BNB was trading at $211 at the time of writing.
Moreover, the asset has devalued by 31% since the SEC lawsuit in June. It is now down almost 70% from its all-time high of $686 in May 2021.
Remarkably, BNB has still outperformed many DeFi tokens, which have been crushed over 90% in this bear market.