Binance is mounting its own legal battle against the SEC. This is in the quest for justice to dismiss the lawsuit the regulator filed against them last June.
Attorneys for the exchenge are expected to file a motion in court today requesting the dismissal of the case. In this way, one of the largest bitcoin (BTC) and other cryptocurrency exchanges in the world will legally face the SEC in a Washington court next week.
On the other hand, an order issued by the United States Court for the District of Columbia ordered judicial review of the case to evaluate whether the digital assets are securities or not. In that sense, federal judge Amy Berman Jackson will authorize both Binance's lawyers and those of the SEC to present their arguments in this regard.
"The Court intends to hear arguments about whether an investment contract should involve a contractual commitment and whether the SEC misinterprets the meaning of the Howey test," Judge Jackson said. She is referring to the parameters that the regulator is using to classify cryptocurrencies, according to which the majority of cryptoassets are securities because the public and the companies that support them anticipate profits.
The SEC filed its lawsuit against Binance and other cryptocurrency exchanges (including Coinbase and Ripple) based on the Howey test. Hence, in many of its legal actions against platforms operating in the United States, it states that the majority of cryptoassets qualify as securities and are subject to the regulatory supervision of the Commission .
The agency thus ensures that these platforms have been trading securities without being authorized to do so and requests sanctions for the defendant companies . Now the Court intends to hear arguments on whether an investment contract implies a contractual commitment to evaluate whether or not the SEC should supervise the cryptocurrency industry.
The date for the presentation of arguments on the issue has not yet been established. Meanwhile, Binance's lawyers moved forward with making a request to the court to have the case dismissed. The resolution of this confrontation could have important consequences for the cryptocurrency sector in general, as happened with the case of Ripple and the SEC. A positive outcome for Binance could set legal precedents and a change in the way the sector has been supervised. Conversely, a ruling favoring the SEC may signal a shift toward a stricter regulatory stance , affecting the way exchanges operate in the US.
Last August Binance formally requested a protective order against the SEC. This, after the federal agency accused the exchange of allegedly violating federal securities laws and committing other criminal offenses. Along with the SEC, the United States Commodity Futures Trading Commission (CFTC) also took legal action against Binance. An accusation that forced the former CEO of Binance, Changpeng Zhao, to reach an agreement with the CFCT and plead guilty to violating anti-money laundering regulations.
