Lawyers representing Binance and former CEO Changpeng “CZ” Zhao have filed a motion to dismiss an amended complaint by the SEC. The motion argues that the SEC is not providing a clear standard for determining which crypto asset transactions qualify as investment contracts. The filing criticizes the SEC for considering almost all crypto asset transactions as securities transactions, even those involving blind secondary market resales of tokens. The lack of clarity in regulations regarding virtual assets is also highlighted in the filing.
The SEC initiated the lawsuit against Zhao and three companies in June 2023, which is separate from the criminal charges brought by the Department of Justice. In November 2023, Binance admitted to engaging in anti-money laundering, unlicensed money transmitting, and sanctions violations, resulting in a $4.3 billion fine. Zhao served four months in prison in the U.S. but has since been released.
The SEC’s actions against cryptocurrency companies have been ongoing, with a recent Wells notice issued to gaming company Immutable. It is evident that the regulatory landscape surrounding cryptocurrencies is evolving, and companies in the industry are facing increasing scrutiny.
Overall, the motion to dismiss the amended complaint by Binance’s lawyers sheds light on the challenges faced by companies operating in the cryptocurrency space due to unclear regulations and inconsistent enforcement actions by regulatory bodies. As the industry continues to grow and innovate, regulatory clarity will be crucial to ensure a fair and transparent market for all participants.
