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In a major legal move, Binance and its former CEO, Changpeng "CZ" Zhao, have filed a joint motion to dismiss the SEC's amended lawsuit submitted last month and to strike portions of the SEC’s requested relief.
In its filing, Binance argues that the SEC, in its Amended Complaint, 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 — that secondary market resales of the assets long after they were first distributed by their developers are not “securities” transactions.
"Instead, the SEC’s Amended Complaint continues to insist that virtually all transactions involving crypto assets—including blind secondary market resales of tokens—are securities transactions because some buyers might hope the assets will increase in value," Binance stated.
It should be recalled that the SEC, in its proposed Amended Complaint motion, stated it was doing away with the term "crypto asset securities," saying in a footnote that it was not referring to the crypto asset itself as a security, while adding that it "regrets any confusion it may have invited."
Binance likewise requested that the court should strike the SEC’s requests for disgorgement from the cryptocurrency company and former CEO Zhao, as well as injunctive relief from the latter.
Fresh attempt after initial lawsuit dismissal move
The move represents a fresh attempt after Judge Amy Berman Jackson allowed the majority of the SEC's allegations to proceed in a June 2024 ruling but dismissed charges tied to Binance's Simple Earn product and secondary BNB sales.
Tomiwabold OlajideThe SEC currently seeks to contend the dismissed charges, addressing in its amended complaint some of the judge's concerns in dismissing parts of its initial lawsuit — namely around ongoing BNB sales and Binance's Simple Earn product, and bolstering other charges that the judge did not fully address in her ruling, specifically the 10 cryptocurrencies the SEC alleged were sold as unregistered securities.
This follows after attorneys argued at a July 2024 hearing about whether the judge's judgment meant that the 10 cryptocurrencies remained in the lawsuit.
The SEC filed its lawsuit against Zhao and three firms, BAM Management U.S. Holdings, BAM Trading Services and Binance Holdings, in June 2023.
Arman Shirinyan
Alex Dovbnya
Vladislav Sopov
Dan Burgin
U.Today Editorial Team