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Cryptocurrency exchange Binance and the exchange’s former CEO Changpeng Zhao, responded to the move by the United States Securities and Exchange Commission (SEC), which sought additional authority to use findings from an agreement with the Department of Justice (DOJ) against them in a lawsuit. Binance and former CEO Zhao’s lawyers argued that the SEC’s action is inappropriate and unacceptable.
“SEC’s Action Is Improper and Unacceptable”
Binance and Zhao’s lawyers responded to the SEC’s move to seek additional authority in a lawsuit filed at the United States District Court for the District of Columbia. The lawyers contended that the SEC’s attempt to use the DOJ’s criminal complaint and subsequent findings from a $4.3 billion settlement agreement in court against them is procedurally improper and unacceptable.
As known, the SEC had brought up findings from Binance’s settlement agreement with the DOJ in its lawsuit, aiming to use them as evidence against Binance and Zhao in court. SEC officials believe that these findings will strengthen their case against the cryptocurrency exchange and its former CEO. However, Binance and Zhao’s lawyers argued that the agreement with the DOJ has no relevance to any of the evidence-dependent claims made by the SEC.
The Binance-SEC case stretches back to 5 June 2023, involving the U.S. federal regulator’s allegations that the company violated securities laws with 13 separate charges. One of the SEC’s accusations is that Zhao and Binance’s U.S. branch, Binance US, used customer assets for their own benefit and commingled customer funds with company funds.
SEC Seeks to Benefit from Other Agencies’ Filings
According to court documents filed on December 12th, Binance and Zhao’s lawyers stated that the SEC’s motion for additional authority did not support the allegations it put forward in the lawsuit filed in June of this year. The lawyers claimed in their court submission that “the SEC’s request is nothing more than an impermissible supplemental brief that identifies no new authority and instead tries to present new factual information and arguments. This alone is a reason for it to be disregarded.”
The cryptocurrency exchange’s lawyers also added that filing for additional authority is not an alternative means to amend the complaint and that the SEC’s efforts to benefit from decisions of other agencies indicate that the SEC is not in communication with any relevant regulatory bodies.
