The US securities regulator has maintained that Binance’s claims in its application to dismiss a lawsuit are without legal foundation and are based on an erroneous legal analysis.
The SEC rejected Binance’s last attempt to have the regulator’s lawsuit dismissed in a court filing on November 7, stating that no court has accepted Binance’s “tortured interpretation of the law.”
In June, the SEC filed a lawsuit against Binance, Binance.US, and its creator, Changpeng “CZ” Zhao, saying that they offered securities without registration and neglected to register as an exchange with the US government.
Binance claimed the SEC had overreached its jurisdiction by bringing up the lawsuit, failing to establish crypto rules, and misinterpreting and applying securities laws to the cryptocurrency space.
The SEC asserted in its most recent reply that Binance “never complied” with federal securities rules, saying this was “a deliberate choice.”
“Binance’s Chief Compliance Officer crudely but succinctly summed up this case when he admitted that Binance was ‘operating as a fking unlicensed securities exchange in the USA bro.’ He was right.”
It also stated that Binance’s claims that cryptocurrency is analogous to “supermarket items like oranges are absurd” and that the sales of cryptocurrency on the exchange qualify as investment contracts for the Howey test.
The regulator restated its assertions that Binance USD (BUSD) and the yield-bearing staking, Vault, and Earn programs are investment contracts and that the BNB initial coin sale breached securities laws.
It also rejected Binance’s assertion that the lawsuit went against the significant questions doctrine, which is a 2022 U.S. Supreme Court decision holding that Congress does not grant agencies jurisdiction.
Other cryptocurrency companies have used this case to challenge the SEC’s purported authority.
According to the SEC, approving Binance’s request for dismissal would “dismantle decades of foundational precedent upon which the nation’s securities laws operate” and substitute the present legal system’s “broad, flexible regime” with a “rigid framework.”