The US Securities and Exchange Commission (SEC) has dismissed Binance’s attempt to end a lawsuit alleging the crypto exchange violated US securities laws. The SEC argues that Binance’s legal arguments are flawed and that the exchange willfully disregarded the law.
In June 2023, the SEC filed a lawsuit against Binance and its founder, Changpeng Zhao, or CZ, accusing them of illegally selling investments without proper registration in the US. Binance denied the allegations and filed a motion to dismiss the lawsuit.
In a filing dated November 7, the SEC rejected Binance’s defense, arguing that the exchange’s legal arguments were “unsupportable” and that Binance “repeatedly violated the registration provisions of the securities laws.”
The SEC specifically criticized Binance’s comparison of crypto to ordinary items like oranges, calling the analogy “ridiculous.” The SEC also argued that Binance’s initial crypto offering and certain programs definitely broke investment rules.
Binance has not yet responded to the SEC’s latest filing. However, in the past, the exchange has maintained that it is not subject to U.S. securities laws because its tokens are not considered securities.
The SEC’s rejection of Binance’s defense means that the lawsuit is likely to proceed. The next step in the case is likely to be discovery, where both sides will exchange evidence.