Binance CEO Changpeng “CZ” Zhao and his cryptocurrency exchange, Binance, are fighting back against the United States Securities and Exchange Commission (SEC) by filing a motion to have the lawsuit dismissed.
This legal battle has been ongoing, with Binance feeling the impact on its American branch, Binance.US, which has seen a significant drop in daily trading volumes.
In their 60-page motion filed in the United States District Court for the District of Columbia, Binance and CZ argue that the SEC has overstepped its authority in pursuing the lawsuit.
They claim that the SEC failed to provide clear regulatory guidance to the cryptocurrency industry before initiating the legal action. Essentially, Binance and CZ accuse the SEC of trying to retroactively assert regulatory control over the crypto sector.
The motion points out that the SEC is attempting to hold both parties responsible for the “illegal” sale of crypto assets dating back to July 2017, a time when the SEC had not yet issued any public guidelines regarding cryptocurrencies.
Binance argues that this lack of regulatory clarity at the time means that the SEC’s case lacks a foundation within the existing securities laws.
Furthermore, Binance’s legal team asserts that the SEC has misunderstood securities laws and their relevance to the cryptocurrency industry.
They believe that the SEC’s efforts to exert regulatory jurisdiction over the crypto sector involve a distortion of the text of the securities laws.