Binance Lawyers File Motion to Dismiss SEC Amended Complaint

Lawyers for Binance and former CEO Changpeng Zhao filed a motion on Monday to dismiss the U.S. Securities and Exchange Commission’s (SEC) amended complaint.

The filing argues that the SEC pays "lip service" to the Court’s ruling that crypto assets are not inherently "securities," yet fails to accept the implications of this ruling.

In a June 29 ruling, a U.S. federal judge rejected most of Binance’s efforts to dismiss the SEC’s charges, largely upholding the claims from the agency. However, the judge found that Binance's BUSD and Simple Earn programs, as well as the secondary sales of BNB, do not qualify as investment contracts. The SEC's complaint aims to revive previously dismissed charges.

Binance’s lawyers stated that the SEC’s amended complaint insists that almost all transactions of crypto assets are securities, suggesting that the hope for value increases validates this classification.

The motion argues that the SEC's complaint lacks a "coherent legal basis" for interpreting crypto assets as investment contracts and fails to clarify its standards in such interpretations.

Additionally, the filing noted that the SEC arbitrarily selects certain assets as securities, recently dropping its claim that transactions involving Ether—the second most common crypto asset—are investment contracts, without explanation.

The SEC’s lawsuit against Binance, Binance.US, and Zhao began in June 2023, alleging the operation of unregistered exchanges, broker-dealers, and clearing agencies. Other cryptocurrency exchanges like Coinbase and Kraken have also faced similar charges from the SEC.

The motion concluded, "Even after 89 pages of guidance from the Court and over a hundred new allegations, the SEC’s amended claims still fail as a matter of law. The problem lies with the SEC’s legal theories, not the facts available."