Binance fights SEC lawsuit in the wake of restraining order application
Barely a week after the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance, the crypto exchange has asked the court to deny the regulator’s proposed temporary restraining against its assets.
Binance locks horn with the SEC
The largest crypto exchange by volume has filed several motions in the US District Court for the District of Columbia on Monday in opposition to SEC lawsuit against it.
In a Monday filing, Binance.us called the SEC filing a draconian and unduly burdensome restraining order. The hearing on the temporary restraining order is to be heard on June 13 in the District Court.
“The SEC’s request for a temporary restraining order should be denied for several reasons, but the most important is this: there is no risk to BAM’s customer assets,” Binance attorney Daniel W. Nelson said in a motion signed by multiple lawyers for the exchange. “Indeed, there is no ‘emergency’ here at all, other than the one manufactured by the SEC for its own purposes, when the alleged securities law violations, according to the SEC, have been going on publicly and openly for years.”
The attorneys slammed the regulator’s entire approach to pursuing its legal action against the exchange. The filing noted that the SEC is yet to identify a single security trading on the BAM’s platform. Hence, the SEC’s claims fail.
The SEC is currently claiming that 68 cryptocurrencies are securities. The filing said: “The SEC suggests that it is a foregone conclusion that cryptocurrency is a security, but that is not the case. That numerous cryptocurrency exchanges, including BAM, have operated in the United States for years without interference by the SEC belies the claim that they are clearly covered by the securities laws.”
The exchange also argued that it’s unable to “identify a single instance in which BAM customer assets were mishandled or misused.”
Binance’s lawyers question the timing of suit
In the 20 motions filed by the Binance.us platform, the lawyers questioned the timing of the suit which coincided with the regulator’s suit against Coinbase.
The lawyers noted that Binance has operated on US soil for years, asking why the SEC failed to bring an action against the platform for years. The motion wonders why the agency let Binance.com and Binance.us grow into its current size if it was illegal all these years.
“The SEC alleges that Binance.com has been operating unlawfully since its launch in 2017, including the early years when the SEC says it openly had U.S. users,” Nelson said.
The documents also note that Binance has been engaging the SEC since 2021. However, the exchange only got to know it was the target of an SEC investigation in February 2023.
The attorneys maintained that there’s no emergency that warrants the grant of the temporary restraining order. Hence, the court should squash the regulator’s application.
“Indeed, there is no ‘emergency’ here at all, other than the one manufactured by the SEC for its own purposes,” the motion added.
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