The Securities and Exchange Commission (SEC) has rejected a bid by Binance to dismiss a lawsuit against it. The SEC alleges that Binance has misused and misinterpreted legal principles in its defense.
What Happened: The SEC has contested Binance’s attempt to dismiss the regulator’s lawsuit, reported Cointelegraph. The SEC argues that Binance’s defense is based on an improper legal analysis and lacks a solid legal foundation.
In a court filing dated Nov. 7, the SEC called out Binance’s previous efforts to have the lawsuit dismissed. The SEC contends that no court has accepted Binance’s “tortured interpretation of the law.”
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Why It Matters: Back in June, the SEC filed a lawsuit against Binance, Binance.US, and its founder, Changpeng “CZ” Zhao. The regulator accused them of selling unregistered securities and failing to register as an exchange in the U.S..
Binance responded to the lawsuit by arguing that the SEC had overstepped its authority. The crypto exchange claimed the SEC had misinterpreted securities laws and applied them to cryptocurrencies without providing clear guidelines.
The SEC, however, countered by stating that Binance “never complied” with federal securities laws, a decision it considered deliberate. The regulator dismissed Binance’s arguments comparing cryptocurrencies to “supermarket items like oranges” as absurd.
The SEC also reiterated that Binance’s initial coin offering (BNB) violated securities laws. It argued that Binance USD (BUSD), along with yield-bearing staking, Vault, and Earn programs, are investment contracts.
The SEC further rebuffed Binance’s claim that the lawsuit violated the major questions doctrine, a 2022 U.S. Supreme Court ruling. The regulator argued that granting Binance’s dismissal request would dismantle decades of legal precedent and replace it with an inflexible framework that undermines existing laws.
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