Binance decided to fight the SEC

Sued by the US Securities and Exchange Commission (SEC), Binance announced its readiness to fight the charges, gaining the support of industry leaders.

"The SEC concludes that cryptocurrencies are securities. But in fact, many cryptocurrency exchanges, including BAM (the operating unit of Binance.US) have been operating in the US for many years without SEC intervention. This negates the SEC's role in protecting this asset class under securities law," Binance.US's June 12 court filing states.

Binance's latest rebuttal comes amid a lawsuit filed by the SEC in a federal court in Washington, listing 13 charges against Binance and billionaire Changpeng Zhao (CZ) on May 6. A day later, the SEC continued to apply for an order to freeze the assets of Binance and Binacne.US. On June 12, Binance also filed a response to the court, arguing that the SEC's request was "draconian and unduly pressured".

On the same day, a Bloomberg source reported that Binance.US has hired George Canellos, a former director of enforcement for the SEC, to join the legal team against the SEC.

"Binance is clearly gearing up for a criminal prosecution and continues to hire the best defense attorneys in the world," John Reed Stark, the SEC's former director of Internet enforcement, wrote on Twitter. He believes that the current SEC charges are just the tip of the iceberg and that the agency can ask for a prison sentence for anyone who pleads guilty or is convicted in relation to Binance.

Meanwhile, the leaders in the crypto market support Binance. Charles Hoskinson, the founder of the Cardano blockchain, wrote on his personal Twitter: "This is an opportunity for the entire crypto industry to come together to fight 'authoritarianism' and protect technological freedom. This is not just about Binance's own war, but the industry's."

Illustrating the legal battle between the SEC and Binance. Photo: Cointelegraph

Earlier in the announcement on May 6, Binance said: "We are very disappointed that the SEC filed a lawsuit against Binance. Despite our efforts, the SEC abandoned the good faith discussion process, replacing it with them. choose to act unilaterally and sue. We're not happy with that choice."

The world's largest exchange insists that it will "do its best to protect the platform". Binance also believes that the SEC's refusal to cooperate in good faith is a mistake in providing transparent guidelines for the digital asset sector.

Binance said it was surprised by the SEC's decision because it would undermine the role of the US in its efforts to become a global financial hub. "An effective regulatory framework requires policy cooperation, transparency, and thoroughness. But the SEC has abandoned this path," Binance said. They have repeatedly stated that they will "stand ready to fight the charges of the SEC within the framework of the law".

One of the SEC's controversial arguments in the lawsuit was the vague definition of "security." In February, SEC Chairman Gary Gensler stated that all cryptocurrencies, except Bitcoin, are securities and are under the control of the agency. He explained in New York Magazine that cryptocurrencies are related to third parties and offer great returns.

However, Gensler's statement drew criticism from both the crypto community and industry experts. Even the US Commodity and Futures Trading Commission (CFTC) disagrees. The lack of consensus between the two regulators is an opportunity for Binance to counterattack in the battle with the SEC. Through the debate on whether Ethereum is a commodity or a security, the community found the SEC's standards to distinguish securities too vague. Back in March, Gensler stated that Ethereum operates on a Proof-of-Stake (PoS) mechanism that should fully meet the standards of securities. But a month later, during his testimony before the US congress, he refused to answer whether Ethereum is a security.

Against this background, US lawmakers and many leaders in the cryptocurrency industry criticized the SEC for its somewhat heavy-handed approach. On June 12, US Representative Warren Davidson even called for the firing of SEC Chairman Gary Gensler through a proposed bill to restructure the committee.

Khuong Nha (according to Coin Telegraph )

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