Attorneys for Binance and its former CEO, Changpeng 'CZ' Zhao, have submitted a new motion to dismiss the amended complaint filed by the Securities and Exchange Commission (SEC) in its ongoing lawsuit against them. The motion, filed on Monday, argues that the SEC's revised complaint does not adequately address the distinction between crypto assets and securities, despite a previous court ruling that crypto assets are not inherently securities. Instead, the SEC allegedly insists that most crypto asset transactions, including secondary market resales, are securities transactions due to the potential for value appreciation.
The lawyers also condemn the SEC for its lack of clarity on virtual asset regulation, stating that the regulator has failed to establish a clear standard for determining which crypto asset transactions qualify as investment contracts. Furthermore, the SEC is accused of arbitrarily selecting which companies to target, having recently dropped its claim that transactions involving Ether constitute investment contracts without explanation. The lawsuit, initiated in June 2023, is separate from the criminal charges brought against Zhao and Binance Holdings by the Department of Justice. In a related development, Binance admitted to violating anti-money laundering and sanctions regulations in November 2023, resulting in a $4.3 billion fine and a four-month prison sentence for Zhao.
The SEC has also taken action against other cryptocurrency companies, including issuing a Wells notice to gaming company Immutable last week.