The U.S. Securities and Exchange Commission (SEC) has filed opposition to a motion to dismiss the lawsuit against Binance.US, Binance, and CEO Changpeng Zhao (CZ), arguing that the defendants violated securities laws and committed fraud.
SEC opposes Binance‘s motion in Securities Lawsuit
The SEC also requested Judge Amy Berman Jackson sign a proposed order in favor of the regulator. The SEC opposes Binance’s motion outlines several reasons why the court should deny the motion to dismiss.
Firstly, the SEC argues that the defendants actions violated the Howey test, which determines whether a transaction is an investment contract and therefore subject to securities laws. The SEC also asserts that the defendants violated investment contract rules by illegally listing unregistered securities in the form of cryptocurrencies.
Furthermore, the SEC opposes Binances motion, claiming that the agency is overreaching its authority by regulating the crypto industry. The SEC maintains that it has the authority to protect investors under existing securities laws, regardless of the asset class involved.
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Additionally, the SEC accuses Binance.US of delaying and failing to cooperate with the SEC‘s investigation. The SEC highlights disputes related to document discovery and depositions, which have hindered the SEC’s ability to effectively investigate the alleged violations.
In response to these allegations, Judge Jackson has set an in-person hearing on the motion to dismiss on January 18, 2024. This hearing will provide an opportunity for both parties to argue their cases before the court.