Changpeng “CZ” Zhao might be out of prison, but Binance continues to fight its lawsuit against US regulators.
Details
- Lawyers representing Binance and CZ are looking to dismiss the SEC's updated complaint
- The update targets additional tokens like Axie Infinity Shards
- They have argued that the court rightly rejected the SEC’s initial attempt to fuse crypto assets with investment contracts
- By doing so, the court acknowledged that crypto assets can be sold as part of an investment contract and that each transaction must independently check off securities laws
Why should you pay attention?
- The legal team further highlighted that the SEC “still refuses” to articulate any standard for courts, litigants, or market participants to know which crypto-asset transactions qualify as investment contracts and which do not
- Further shedding light on the bias, they underlined that the agency “continues to choose winners and losers arbitrarily”
- The SEC recently “abandoned with no explanation” its claim that transactions involving Ether are investment contracts, they said
Who said what?
- Lawyers underlined that the SEC’s amended complaint “pays lip service” to the court’s ruling, but “refuses to accept the logical conclusion — that secondary market resales of the assets long after they were first distributed by their developers are not ‘securities’ transactions”
- The filing further noted,
“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”
Zooming out
- Alongside CZ, the SEC sued three companies — BAM Management U.S. Holdings, BAM Trading Services, and Binance Holdings in June last year
- The aforementioned case is different from the criminal charges filed against Zhao and Binance Holdings by the DoJ
- The legal team asserted in their filing that 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 from the legal point of view
