This summary text is fully AI-generated and may therefore contain errors or be incomplete.
Binance and its founder, Changpeng Zhao (CZ), are strongly disputing allegations made by the U.S. Securities and Exchange Commission (SEC) regarding the trading of unregistered securities. The SEC filed a lawsuit in June, accusing Binance and CZ of allowing the trading of unregistered securities. Binance and CZ argue that the SEC has not provided enough evidence to prove the existence of an investment contract under the Howey Test, a legal framework used to determine the legitimacy of an investment contract.
One of the main arguments made by Binance and its U.S. affiliate, Binance.US, is that platform users are not bound by any contracts after purchasing certain cryptocurrencies. They claim that there needs to be a dependence on the efforts of others for an investment contract to exist, which they believe is not the case for their customers.
In addition to disputing the SEC’s claims, Binance and CZ are challenging the SEC’s jurisdiction. The SEC cited settlements and consent orders that Binance signed with other regulatory agencies as proof of the exchange’s activities in the U.S. However, Binance and CZ argue that these settlements and consent orders do not implicate securities laws and that the SEC’s theory that the crypto assets were securities lacks a solid foundation.
The legal dispute between Binance and the SEC has become a complex battle of legal interpretations and regulatory jurisdictions. Binance and CZ’s legal team argues that the SEC’s allegations exceed the regulator’s authority, similar to arguments made earlier in the year when Binance sought to dismiss a separate suit by the Commodity Futures Trading Commission (CFTC).
Despite these legal challenges, Binance’s native cryptocurrency, Binance Coin (BNB), has remained resilient. The exchange settled with regulatory organizations for $4.3 billion, but BNB continues to report gains for its holders. BNB’s social dominance, a measure of its relevance and adoption among market participants, has increased since December 5, 2023. Currently trading at $254.76, BNB has seen a 1.15% increase in the last 24 hours.