Binance, the world’s largest digital asset trading platform, has submitted a legal argument stating that its settlement with the Department of Justice (DoJ) and FinCEN is not related to the lawsuit filed by the United States Securities and Exchange Commission (SEC). Binance DoJ settlement on the other hand, is on the securities regulator’s scope, with an intent to be used as an admission of guilt in its own lawsuit.
Related reading: SEC to Pursue Binance Lawsuit Regardless of $4.3B Fine
Binance and its co-founder and former CEO, Changpeng Zhao (CZ), filed the legal brief with the U.S. District Court for the District of Columbia. The firm stated that the SEC’s move to include the guilty plea worth $4.3 billion with the DoJ in its own continuing case is procedurally incorrect. The court was asked to dismiss the regulator’s request.
Binance DoJ Settlement and the SEC
The SEC filed a lawsuit against Binance on June 5, accusing the digital asset trading platform of 13 security violations. The agency claims that Zhao and Binance managed, mixed, or redirected customer assets on Binance.US, the U.S. arm of the platform. It argued at the time:
“Defendants have enriched themselves with billions of U.S. dollars while placing investors’ assets at significant risk. […] Defendants have engaged in multiple unregistered offers and sales of crypto asset securities and other investment schemes.”
Moreover, the securities regulator claimed that Binance’s digital asset offerings, such as BNB and BUSD, along with its staking program, were unregistered securities.
On November 20, Bloomberg reported that Binance and the DoJ were working on a $4.3 billion deal, which would result in the exchange continuing its operations while complying with U.S. laws. The deal went through, and Zhao resigned, appointing Binance executive Richard Teng as the new CEO.
As reported earlier by BitcoinNews, the SEC stated that it would continue to pursue its lawsuit against Binance irrespective of the settlement with the DoJ. The regulator said that Binance’s admission of guilt made its case against the exchange stronger.
Binance Retaliates
In the court filing submitted on December 12, Binance stated that the SEC’s supplementary brief submitted in early December post-DoJ settlement, does not present new evidence in the case, while adding:
“The SEC Notice is an impermissible supplemental brief that identifies no new “authority” and instead attempts to introduce new factual information and arguments. This alone is reason to disregard it.”
Binance stated that it admits to the DoJ that it failed to maintain strict AML and KYC policies under the Bank Secrecy Act, which “says nothing about registration obligations under federal securities law, nor does it say anything about any role in the alleged conduct of securities transactions or listing of assets alleged to be securities.”
