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The SEC filed a lawsuit against Binance, the world’s largest cryptocurrency exchange, alleging that it violated SEC rules. Federal Judge Amy Berman Jackson has ruled that the lawsuit should be dismissed. She is expected to present her dismissal case before her on Monday.
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SEC’s charges against Binance are as follows:
- Changpeng Zhao, the CEO and founder of Binance, and the exchange’s U.S. arm, artificially inflated trading volumes
- Diverted customer funds
- Did not restrict U.S. customers from accessing its platform
- Misled investors about market surveillance controls
- Facilitated the illegal trading of several cryptocurrencies that the SEC classified as unregistered securities
It was also conveyed that there is no evidence of fraud behind so many charges.
Binance agreed to pay $4.3 billion to settle with the Justice Department and the Commodity Futures Trading Commission for illegal financial violations.
Although Changpeng Zhao accepted the lawsuit and agreed to pay the requested money, the rest of the case continues with Binance.
(SEC) A journalist who closely follows the case said the following:
“Binance has reached agreements with other organizations, including the DOJ and the CFTC. However, it is unwilling to settle with the SEC. Because doing so would mean acknowledging that the tokens mentioned in the case are securities. This could have a more significant impact on Binance’s business model than anti-money laundering compliance issues.”
Another journalist who also closely follows the case referred to the SEC’s jurisdiction, saying:
“Binance has a strong argument that the SEC has exceeded its jurisdiction and has not proven fraud, and it wants to try its luck in court because it believes in that.”
The identities of these two sources were not disclosed due to the confidentiality of legal proceedings.
The SEC ‘s lawsuit against Binance is one of many lawsuits the regulator has filed against cryptocurrency companies in recent years.
The SEC was known for winning all of its lawsuits against the cryptocurrency community. However, it partially lost its first major lawsuit, the Ripple (XRP) case. The SEC initially focused on companies that sell digital tokens. However, it has turned to firms that offer trading platforms and exchange activities and act as broker-dealers.