The U.S. Securities and Exchange Commission (SEC) has filed a complaint against Binance, one of the world’s largest cryptocurrency exchanges. The SEC’s lawsuit seeks emergency relief and alleges violations of securities laws by the exchange.
Binance has responded with a statement expressing disappointment and vowing to vigorously defend its platform.
The 13 charges filed against Binance and CZ marks a departure from the ongoing discussions between Binance and the SEC to reach a negotiated settlement. Binance asserts that it has actively cooperated with the SEC’s investigations and worked diligently to address the regulator’s concerns. However, the SEC’s decision to file the complaint unilaterally and pursue litigation has left Binance disheartened.
While Binance acknowledges the seriousness of the SEC’s allegations, the exchange believes they should not be the basis for an enforcement action, especially on an emergency basis. Binance intends to mount a strong defense against the SEC’s claims. The exchange further criticizes the SEC for its perceived lack of clarity and guidance for the digital asset industry, opting for enforcement and litigation instead of a thoughtful, nuanced approach.
One of the most significant concerns raised by Binance is that the SEC’s actions undermine America’s standing as a global hub for financial innovation. With digital asset regulations still evolving worldwide, Binance argues that regulation by enforcement is not the most effective path forward. The exchange believes that a collaborative, transparent, and thoughtful policy engagement is necessary to develop an effective regulatory framework.
Binance vehemently denies any allegations that user assets on its platform, including Binance.US, have ever been at risk. The exchange asserts that user assets are safe and secure, and it pledges to defend against any allegations to the contrary.
Binance suggests that the SEC’s actions may be driven by an attempt to assert jurisdictional dominance over other regulators, rather than prioritizing investor protection.
Changpeng CZ Zhao, the CEO of Binance, retweeted a response to Gary Gensler’s tweet questioning Binance if they are even protecting consumers or not.
According to Binance, the SEC’s actions seem to be more focused on generating headlines rather than safeguarding investors. The exchange claims that the SEC should have engaged with Binance on the facts and the safety measures implemented on the Binance.US platform.
Binance pledges to continue cooperating with regulators and policymakers globally while emphasizing the need for innovation and consumer protection in the cryptocurrency industry.
As a non-U.S. exchange, Binance maintains that the SEC’s actions are limited in reach. Nonetheless, the exchange stands in solidarity with digital asset market participants in the U.S. who oppose what they perceive as the SEC’s overreach.
Binance is prepared to fight the lawsuit to the full extent of the law and pledges to collaborate with industry partners to defend the technology underlying cryptocurrencies.
Binance’s response to the SEC lawsuit highlights the escalating tensions between regulators and the rapidly evolving digital asset industry. The outcome of this legal battle will likely have implications not only for Binance but also for the regulatory landscape surrounding cryptocurrencies in the United States and beyond.