The lawyers representing Binance and former CEO Changpeng Zhao have filed a motion on Monday to dismiss the U.S. Securities and Exchange Commission’s amended complaint.
“The SEC pays lip service to the Court’s ruling that crypto assets are not in and of themselves “securities,” but refuses to accept the logical conclusion of that ruling,” the filing said.
In the June 29 ruling, a U.S. federal judge had rejected most of Binance’s attempt to dismiss the SEC’s charges, upholding most claims from the agency.
However, the judge ruled against the agency, finding that Binance's BUSD and Simple Earn programs, as well as the secondary sales of BNB, do not constitute investment contracts. The securities watchdog’s complaint attempts to reinstate the previously dismissed charges.
Binance lawyers stated in the latest filing that the SEC’s amended complaint insists that virtually all transactions involving crypto assets, including blind secondary market resales of tokens, are securities transactions on the basis that some buyers may hope the assets will increase in value.
The motion further stated that the SEC’s amended complaint lacks “coherent legal basis” to interpret crypto assets as investment contracts, and chooses not to provide clarity on its standard in making such interpretations.
“And the SEC continues to choose winners and losers arbitrarily, recently abandoning with no explanation its claim that transactions involving Ether—the second most common crypto asset, after Bitcoin—are investment contracts,” the filing said.
The SEC filed the lawsuit against Binance, Binance.US and Zhao in June 2023 with charges of operating unregistered exchanges, broker-dealers, and clearing agencies. Several other cryptocurrency exchanges, including Coinbase and Kraken, have also been targeted by the SEC with similar charges.
“Even after 89 pages of guidance from the Court and over a hundred new allegations (not to mention 16 months of expedited discovery), the SEC’s amended claims still fail as a matter of law,” the Monday filing said. “The problem is with the SEC’s legal theories, not the facts at its disposal."
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