In response to Binance’s earlier attempt to discard the SEC lawsuit, the Securities and Exchange Commission (SEC) has maintained its stance, stating that Binance’s dismissal plea lacks legal substance. The SEC filed a counter on Wednesday, alleging that the exchange’s defense is based on misinterpretations of the law that pose a risk to established precedents necessary for the functioning of the country’s securities laws. The SEC argues that Binance’s approach proposes a rigid framework that is incompatible with the existing legal system.
The SEC’s allegations are directed at Binance’s launch of the BNB token and Binance USD (BUSD), which the agency considers as violations of securities laws. In addition, the SEC argues that the company’s staking and earning programs breach securities regulations. Furthermore, the SEC rejects Binance’s reliance on the “Major Questions Doctrine,” a principle increasingly used by crypto firms in their legal defenses.
Binance Challenges SEC Over Legal Reach
Binance, along with its U.S. arm and founder Changpeng Zhao, has argued that the SEC’s suit represents an overreach of its regulatory mandate. They claim that the agency must adequately demonstrate how its actions violate securities laws. However, the SEC firmly rejected this notion, emphasizing its duty to enforce the legal frameworks set by Congress.
This legal dispute occurs at a time when the SEC is consistently scrutinizing the cryptocurrency industry. While Binance maintains that the SEC’s interpretation of its activities as violations is questionable, the SEC continues to advocate for applying traditional securities law in the cryptocurrency sector.
