Binance’s Legal Team Moves to Dismiss SEC’s Expanded Crypto Securities Claims
In the latest development in the ongoing legal battle between Binance and the U.S. Securities and Exchange Commission (SEC), lawyers representing the crypto exchange and its former CEO Changpeng “CZ” Zhao have filed a motion to dismiss the SEC’s amended complaint.
The SEC’s amended complaint, filed in September, targeted additional crypto tokens such as Axie Infinity Shards (AXS), Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), and Decentraland (MANA), alleging that Binance facilitated securities transactions involving these assets.
However, Binance’s legal team argues that the SEC’s claims “fail as a matter of law.” They contend that the court has already ruled that crypto assets are not inherently securities, and that each transaction must independently satisfy securities law requirements, especially in the case of secondary market resales.
The lawyers further criticized the SEC for refusing to “articulate any standard” for determining which crypto asset transactions qualify as investment contracts and which do not. They accused the SEC of “choosing winners and losers arbitrarily,” pointing to the regulator’s recent decision to abandon its claim that Ether transactions are investment contracts.
Binance’s defense claims the SEC’s amended complaint “pays lip service” to the court’s previous ruling, but continues to insist that “virtually all transactions involving crypto assets” are securities transactions simply because some buyers may hope the assets will increase in value.
The motion to dismiss argues that secondary market resales of crypto assets long after their initial distribution should not be considered securities transactions, as the buyers in these “blind” transactions are unaware of the seller’s identity.
The latest legal maneuver represents the ongoing tension between the crypto industry and the SEC as the two sides grapple with the application of securities regulations in the rapidly evolving digital asset landscape. The outcome of this case could have significant implications for the future of crypto asset trading and regulation in the United States.
