Binance has again urged the United States District Court for the District of Columbia to dismiss the lawsuit from the Securities and Exchange Commission (SEC).
Last month, Binance settled with the United States Department of Justice (DoJ), agreeing to pay over $4 billion in settlement. However, the legal challenges for Binance and its co-founder, Changpeng Zhao, are far from over.
Binance Claims SEC Lacks Statutory Authority Over Exchanges Sales of Crypto
Through a December 12 court filing, Binance stated that when customers purchased crypto tokens through its platform, the investment contract did not exist. Hence, it argues that the SEC’s failure to establish an investment contract is sufficient to dismiss the case.
Moreover, it believes the SEC does not have “statutory authority over exchanges sales of crypto assets.” Binance mentioned in the court document:
“Yet the SEC now asks this Court to accept a novel, contorted interpretation of the securities laws, hinging virtually its entire case on the argument that an “investment contract” need not include either an investment or a contract.”
Regarding the BNB token, Binance says that the SEC failed to prove that BNB token holders profited from Binance Holdings Limited’s efforts.
“Expectations of profits from the efforts of others” is one of the prongs of the Howey test, which determines whether an investment is a security. Binance wrote in the court document:
The SEC must show that “profits flow predominantly from the efforts of others,”
Read more: What Is the Howey Test and How Does It Impact Crypto?
Also in September, Binance filed a petition to dismiss the SEC lawsuit, stating that the SEC’s claims “fail as a matter of law.”
While Binance is fighting to dismiss the SEC lawsuit, it had to agree to pay $4.3 billion in settlement to the US regulators in November. As a part of the settlement, Changpeng Zhao, the co-founder of Binance, stepped down from his CEO position.
Amidst these setbacks, the BNB coin has underperformed compared to the flagship crypto – Bitcoin. While Bitcoin has been in a strong uptrend since late October, the screenshot below shows that BNB has underperformed by at least 16%
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Read more: How To Buy BNB and Everything You Need To Know
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