On Tuesday, the lawsuit between the United States government and Binance took a new dimension after the SEC revealed its plan to seek leave so as to adjust its complaints, including “Third Party Crypto Asset Securities.” In its new filing with the U.S. court for the District of Columbia, the regulator it has already informed the defendants (Binance, Changpeng Zhao, and Bam Trading Services) about its intended amendment.
Both parties, according to the filing, have met and agreed to the motion for amendment within 30 days of entry though subject to court’s approval. While they all agreed to a schedule of briefing, they couldn’t agree whether discovery should commence. SEC’s proposal is for the discovery to commence, irrespective of any pending motions. However, Binance is insisting that discovery cannot commence without checking and reviewing the proposed amended complaints from the SEC.
The Genesis of the legal battle between the SEC and Binance
Don’t forget that the regulator had initiated the lawsuit in 2023, accusing Binance and its executives of violating securities laws. In the lawsuit, it defined major crypto assets like SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI as securities and insisted that Binance erred by offering these products without due registration. Other charges include operating a sham exchange, misrepresenting trading controls, and many more.
Among other things, the SEC also accused Binance and Zhao of failing to restrict U.S. users from trading on its global platform. According to the regulator, Zhao ordered executives of the exchange to subvert their security protocols so as to secretly allow its VIP customers in the United States to trade on its platform. Also, in the lawsuit, the SEC says Binance lied that its affiliate in the country was an independent trading platform but it secretly controls the operations of the entity.
Beyond the SEC, another U.S regulatory agency that sued Binance is the commodity futures trading commission (CFTC). In its own lawsuit, the CFTC accused Binance of aiding money laundering through its sham practices. However, the case reached a logical end after the exchange agreed to pay $2.7 billion in settlement to the CFTC last December. The deal also saw the resignation of Zhao as the CEO of Binance
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