In a recent development, renowned crypto journalist Colin Wu, through Wu Blockchain X post, has brought to light the U.S. Securities and Exchange Commission’s (SEC) utilization of Binance Holdings Ltd.’s substantial $4.3 billion settlement with the Justice Department and other US authorities. The SEC perceives this settlement as fortification for its legal battle against the world’s largest cryptocurrency exchange.
According to a recent report, the SEC asserted on Friday that the federal court in Washington, D.C., overseeing the case, should consider the acknowledgments made by Binance and its former CEO, Changpeng Zhao, in the settlement reached on November 21st.
Changpeng Zhao and Binance have sought the court’s dismissal of the lawsuit. Filed in June, the SEC’s lawsuit accuses Binance and Zhao of mishandling customer funds, providing deceptive information to investors and regulators, and breaching regulations.
Moreover, the SEC rebuffed Binance’s plea, arguing that it lacked legal substance. The regulatory body is challenging Binance’s attempt to dismiss the case, contending that the exchange’s defense hinges on misconstrued interpretations of the law.
SEC Highlights Threat Posed By Binance’s Legal Stance
SEC has emphasized the criticality of well-established legal precedents that underpin the effective operation of the nation’s laws. The SEC has argued that the stance adopted by Binance proposes a rigid framework that runs counter to the existing legal structure. This stance could create conflicts, undermining the legal system’s effectiveness.
Following former Binance CEO Changpeng Zhao’s admission of guilt, U.S. District Judge Richard Jones ruled on December 7, 2023, that CZ must remain within the United States until sentencing, according to a court filing.
The judge has prohibited Changpeng Zhao from returning to his United Arab Emirates residence until the conclusion of sentencing for a felony crime in the U.S. Under the plea agreement, Zhao, who stepped down as Binance’s CEO, potentially faces a maximum sentence of 10 years in prison but is expected to receive a sentence not exceeding 18 months.
Additionally, he consented to a $50 million fine. This ruling on Thursday overturned a prior decision by a U.S. magistrate judge that had previously allowed Zhao to return to the United Arab Emirates. Using Binance’s colossal settlement as leverage in their legal battle signifies a crucial step forward in pursuing regulatory compliance within the cryptocurrency industry.