Binance says that DOJ settlement lacks relevance in SEC case as it moves for dismissal

Binance submitted two key filings on Dec. 12 in an ongoing case previously launched by the the U.S. Securities and Exchange Commission (SEC).

Binance’s first filing moves to dismiss the case that the SEC launched against its companies and its former CEO Changpeng Zhao in June.

The filing asserts that the SEC has not plausibly alleged that various Binance tokens and services are securities or investment contracts.

It also asserts that the SEC’s specific claims around Binance’s BNB token are time-barred, meaning that offerings of the asset occurred outside of the U.S. or the SEC’s charges are untimely. Furthermore, the filing alleges that claims around certain transactions, including BNB Vault and Simple Earn, aim to apply securities law outside of the U.S. in a way that is not permissible.

Binance’s filing additionally asserts that the SEC’s failure to provide fair notice about its securities claims compels dismissal of the lawsuit.

Finally, the filing asserts that complaints against Zhao should be dismissed due to lack of personal jurisdiction. According to defense lawyers, Zhao’s role in controlling Binance is not solely sufficient for jurisdiction, and the SEC has failed to allege that Zhao had contact with U.S. users in a way that is relevant to the case.

SEC also addressed DOJ settlements

Binance and Zhao arranged plea deals with the Department of Justice (DOJ) and a number of other U.S. government agencies during the week of Nov. 20. Though those plea deals are separate from the ongoing SEC case, the securities regulator asked courts to take into account both plea deals on Dec. 8.

Binance contested this in another filing on Dec. 12, which reads:

“In addition to being procedurally improper and impermissible, the SEC Notice fails to demonstrate the relevance of the resolutions with the Department of Justice and FinCEN to any of the SEC’s defective claims against [Binance Holdings Limited] and Mr. Zhao.”

Binance’s filing added that the SEC has not amended its complaint, asserting that the agency’s judicial notice is not an alternative to amendment.

Numerous other objections are also detailed in the text. According to the filing, plea deals from Binance and Zhao only show that the involved parties violated the Bank Secrecy Act, but do not demonstrate that Binance and Zhao received fair notice from the SEC regarding two other securities and exchange acts.

The filing also maintained lack of jurisdiction defenses that apply to Binance’s companies and to Zhao himself. Specifically, it said that “no admission in the plea agreements indicates that relevant transactions occurred, or irrevocable liability attached, in the United States.” Regarding Zhao, the filing said that personal jurisdiction has a different meaning in criminal cases and civil cases — implying that jurisdiction exists in the DOJ case, but not the SEC case.

Binance concluded by stating that the SEC’s notice should be disregarded. It once again pressed for the case to be dismissed entirely.

Leave a Reply

Your email address will not be published. Required fields are marked *