In an attempt to have the most recent amended complaint from the U.S. Securities and Exchange Commission (SEC) dismissed, Binance and its former CEO, Changpeng “CZ” Zhao, have contested the SEC’s regulatory stance on cryptocurrency assets. Digital tokens such as Axie Infinity (AXS), Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), and Decentraland (MANA) allegedly violate the SEC’s updated complaint, initially filed in September. The legal team for Binance is attempting to have the SEC’s enlarged allegations dismissed on the grounds that they are illegal.
Binance’s attorneys argue in their November 4 filing that the SEC’s action disregards a previous decision that declared cryptocurrency assets are not securities by definition. According to Binance, the SEC has not changed its stance and still views practically all cryptocurrency-related transactions as securities transactions, including secondary market resales that take place long after developers first distribute them.
The motion highlights what Binance refers to as the SEC’s regulatory ambiguity about which cryptocurrency transactions are subject to securities regulations. The exchange claims that this ambiguity has caused market players and cryptocurrency companies to lack clear instructions on how to comply, which has resulted in rising compliance expenses for the sector as a whole.
The SEC’s new lawsuit, according to Binance, ignores the court’s earlier decision suggesting that token transactions on the secondary market do not always qualify as securities. Binance argues that securities rules should only apply to transactions specifically structured as investment contracts.
The protracted legal battle has made the SEC’s regulatory position on digital assets more closely watched. Binance’s move draws attention to a significant weakness in the SEC’s regulations, which the filing claims lack precise guidelines that would assist businesses and investors in comprehending the legal standing of different cryptocurrency transactions.
Beyond this legal dispute, Binance recently signaled the exchange’s sustained participation in global markets despite regulatory obstacles by announcing a $3 million relief fund to help towns in Spain hit by catastrophic flooding.
