Binance Guilt Admission Sought by SEC in Own Case

Dec. 13, 2023
Binance Guilt Admission Sought by SEC in Own Case

Binance Holdings and its former CEO, Changpeng Zhao, have responded to the United States Securities and Exchange Commission’s (SEC) attempt to include Binance’s admission of guilt to the Department of Justice (DOJ) in the ongoing legal proceedings on December 12, 2023.

Binance Rejects SEC’s $4.3B Claim: Legal Showdown Unfolds

In a filing submitted to the U.S. On December 12, Binance contested the SEC’s move in the District Court for the District of Columbia, arguing that the attempt to include the $4.3 billion guilty plea and settlement agreement in the current case was procedurally incorrect and should be rejected.

A legal battle between Binance and the SEC unfolded on June 5, 2023, when the regulators filed a lawsuit to accuse the cryptocurrency exchange giant of 13 violations of securities laws. The U.S. accused Changpeng Zhao and Binance of mismanaging their customers’ assets on Binance. The accusations ranged from improper management to mixing or redirecting the funds.

Binance vs. SEC: Legal Chess Unfolds

The settlement with Binance, the world’s largest crypto exchange by trading volume, comes in November with its former CEO and concludes the government investigation into their operations. To continue U.S. operations, it agreed to a $4.3 billion penalty per the settlement terms and agreed to comply with regulations.

Formally, the SEC did not embroil itself in the DOJ settlement. However, it argues that the federal court overseeing its case against it should consider statements and acknowledgments. The firm made these and Zhao in the November 21 settlement.

Furthermore, the SEC argued that these resolutions constituted evidence. It knew it was China-based and operating in the U.S., serving American customers and tapping U.S. infrastructure for transactions. In reply, Binance said that the SEC didn’t show how the resolutions it reached with the DOJ were related. Specifically, Binance argued that the resolutions do not address the SEC’s “faulty claims” on Binance Holdings and Zhao.

Besides, Binance, in court filings dated December 12, 2023, argued that the SEC notice failed to support its June 2023 lawsuit allegations. Moreover, the company asserts that the SEC Notice is an impermissible supplemental brief identifying no new ‘authority. Instead, it attempts to introduce further factual information and arguments. This alone is a reason to disregard it.”

In addition, Binance stressed that a judicial notice doesn’t substitute an amendment of a complaint. The company stressed the SEC’s reliance on settlements with other agencies, highlighting the necessity for more information on the SEC’s regulatory authority. This highlights the importance of transparency and comprehensive disclosure in regulatory processes.

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Rida Fatima

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An ardent wordsmith with a rich five-year background in delving into the realms of finance and cryptocurrencies. Alongside curating captivating blogs, Unique's talents extend to crafting imaginative and engaging content.