- Tomorrow, the attention of the cryptocurrency world will be on the case between Binance and SEC. Here’s what you need to know.
Binance, the world’s largest crypto exchange, will face off against the US Securities and Exchange Commission (SEC) in a courtroom in Washington next week.
This important hearing could potentially determine how cryptocurrencies are regulated.
Binance previously asked Federal Judge Amy Berman Jackson to dismiss a lawsuit filed by the SEC in June alleging Binance violated agency rules.
The crypto exchange is expected to file its motion to dismiss the case on Monday.
The SEC accused Binance, its CEO and founder Changpeng Zhao, and the exchange’s US arm of artificially inflating trading volumes, misappropriating customer funds, failing to restrict US customers from its platform, and misleading investors about market surveillance controls.
The regulator also alleges that Binance illegally supported the trading of several cryptocurrencies that are considered unregistered securities by the SEC.
The hearing, originally scheduled for Friday, was postponed due to snowfall in the Washington, DC area and has been rescheduled for Monday, January 22 at 6:00 PM ET (10:00 AM EST).
This hearing follows a separate lawsuit filed earlier this week by the SEC against rival US crypto exchange Coinbase, which the SEC also accused of trading cryptocurrencies that should actually be registered.
The SEC has long maintained that most cryptocurrencies are akin to securities subject to its supervision, and this stance has been widely disputed by the crypto industry. Both cases are expected to shape the SEC’s authority over the industry.
BAM Trading, the operator of Binance.US, argued in court filings that the SEC lacks the authority to oversee crypto assets. This is a stance similar to that of Coinbase, which also asked for the SEC lawsuit to be dismissed.
Binance also stated that the US regulator did not prove that Binance committed fraud.
Last year, Binance Holdings agreed to pay $4.3 billion to settle with the Department of Justice and the Commodity Futures Trading Commission over illegal financial violations, and Zhao was found guilty of violating US anti-money laundering laws.
However, the SEC’s lawsuit still haunts the stock market.
While Binance has reached settlements with other agencies, including the DOJ and CFTC, it did not want to settle with the SEC because doing so would mean admitting that the tokens mentioned in the case were securities.
Such an admission could potentially impact Binance’s business model more than anti-money laundering compliance issues.
Binance also wanted to try its luck in court, believing there was strong evidence that the SEC overstepped its jurisdiction and did not prove fraud.