On December 12th, Binance submitted documents to the U.S. District Court for the District of Columbia, vehemently contesting the Securities and Exchange Commission’s (SEC) attempt to bolster its case against the cryptocurrency exchange. The exchange argues that the $4.3 billion settlement agreement reached with the Department of Justice (DOJ) and the Financial Crimes Enforcement Network (FinCEN) is not directly relevant to the SEC’s charges.
On December 8th, the SEC claimed that Binance Holdings Ltd.’s settlement agreement with the DOJ and others supports its lawsuit, urging the court to consider admissions made in the settlement by Binance CEO Changpeng Zhao (CZ). However, the exchange and CZ are now pushing back, filing a response challenging the SEC’s assertions.
Binance’s Response to SEC’s Notice
According to the latest filing, the SEC’s “Notice of Supplemental Authority” is labeled as procedurally improper and impermissible. The exchange contends that the SEC’s notice fails to establish the relevance of the resolutions with the DOJ and FinCEN to the SEC’s claims against Binance and CZ. Binance argues that the SEC’s attempt to introduce new factual information and arguments through the notice is reason enough to disregard it.
Furthermore, Binance refutes the SEC’s use of the resolutions to counter The exchange’s fair-notice argument. The filing highlights that the SEC’s reliance on the resolutions to establish violations of the Bank Secrecy Act does not address whether there was fair notice of the SEC’s theory regarding the classification of crypto assets as securities. Binance argues that the SEC is attempting to conflate different statutory schemes, emphasizing the lack of notice regarding regulatory authority.
The filing delves into the extraterritoriality aspect, asserting that the SEC misunderstands the territorial reach of securities laws. The exchange challenges the SEC’s invocation of factual admissions, stating that they do not establish that relevant transactions occurred in the United States. The argument is that the SEC’s claims lack plausibility, and the SEC is attempting to benefit from other agencies’ resolutions under a different statutory regime.
The exchange urges the court to disregard the SEC’s notice, emphasizing that it neither supports the SEC’s claims nor undermines its arguments for dismissal. However, the legal battle between Binance and the SEC continues to unfold, with both parties vigorously presenting their perspectives before the U.S. District Court.
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