Binance and its former CEO, Changpeng “CZ” Zhao, are continuing their legal battles against the U.S. Securities and Exchange Commission (SEC).
In a Nov. 4 filing, Binance’s lawyers asked a U.S. court to dismiss the SEC’s revised lawsuit, which now targets specific tokens, including Axie Infinity Shards (AXS), Filecoin (FIL), Cosmos’ ATOM, The Sandbox’s SAND, and Decentraland’s MANA, as securities.
The motion argues that the SEC’s claims “fail as a matter of law.” Binance’s lawyers say that just because people buy these tokens doesn’t mean they’re “securities.”
The lawyers argue that secondary sales of these tokens—when people buy and sell them on the open market without knowing the original seller—should not be labeled as securities transactions just because some buyers might expect the price to go up.
The lawyers also say that the SEC has been unclear about which crypto transactions count as securities deals. “The SEC still refuses to articulate any standard… to know which crypto-asset transactions qualify as investment contracts,” Binance’s filing states
The team pointed out that the SEC recently decided not to call Ethereum (ETH) a security but didn’t explain why. This confusion makes it hard for crypto companies to know what the rules are.
The SEC’s case against Binance began in June 2023, when SEC accused Binance and its U.S. partners of selling unregistered securities. Also, CZ was recently released from prison after serving four months on separate charges related to money laundering.
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