Binance, its U.S. counterpart, Binance.US, and their founder Changpeng Zhao, widely known as CZ, have recently challenged a lawsuit brought against them by the Securities and Exchange Commission (SEC). They argue that the SEC is making claims that aren’t firmly grounded in legalities.
Earlier this year, the SEC took action against Binance, asserting that the platform and its founder, CZ, made certain cryptocurrencies available to U.S. investors that weren’t properly registered. This legal spat led to concerns over the accessibility of funds held in Binance.US by its users.
Lawyers representing Binance and Binance.US have highlighted what they see as the SEC’s attempt to stretch the bounds of its jurisdiction. They argue the SEC is acting beyond its mandate by labeling most crypto activities and assets as securities. The SEC’s interpretation of an “investment contract” has also been criticized as overly expansive.
Also Read : Binance’s Changpeng Zhao Dismisses Stablecoin Delisting Rumors, Confirms Compliance With EU’s MiCA Regulation
The “Major Questions Doctrine” in Play
A significant point of contention is the application of the “major questions doctrine.” This legal principle advises that federal agencies should not take major action without clear guidance from Congress.
Interestingly, Congress has, since 2019, mulled over multiple frameworks for cryptocurrencies and trading platforms. However, none of these discussions have indicated an intention to grant the SEC the sole power of oversight. Despite this, the SEC is pushing to expand its influence over the crypto industry.
It’s noteworthy to mention BAM’s viewpoint. They’ve expressed concern over the SEC’s demands, labeling them excessive and unnecessary. Suggesting a more collaborative approach, they’ve asked both parties to sit down and discuss the specifics of the SEC’s requests.
The tension between Binance and the SEC reflects the broader challenges the cryptocurrency industry faces as it seeks clarity on regulatory frameworks in the United States.
