Binance, Binance.US, and Changpeng Zhao, commonly known as “CZ,” have contested the U.S. Securities and Exchange Commission’s (SEC) allegations in a recent filing.
They argue that the SEC failed to satisfy the criteria outlined in the “Howey Test” in its lawsuit against the two companies and their founder. In their response, Binance and Zhao, more commonly known as “CZ,” filed a reply to the SEC alongside Binance.US, which submitted its own separate but similar filing.
Binance, CZ, and Binance.US asserted that the SEC did not demonstrate that the exchanges’ U.S. customers entered into contracts that fit the definition of an “investment contract.” They also contend that the SEC did not establish the presence of other key elements outlined in the Supreme Court case.
The SEC claimed that these platforms allowed the public to purchase and trade unregistered securities through the listing of specific cryptocurrencies and offering a staking service.
In the recent legal documents filed on Tuesday, Binance and Binance.US responded to the Securities and Exchange Commission’s (SEC) reply to the motion to dismiss.
Both entities argued that the SEC failed to demonstrate any obligations to users of the exchange once they bought specific cryptocurrencies. This implies that, according to the Howey Test criteria, there might not be an investment contract in place.
In another filing on Tuesday, Binance contended that regulations related to securities would not be applicable in the same way that laws such as the Bank Secrecy Act or the International Emergency Economic Powers Act (which were pertinent to the charges settled by Binance and Zhao) were.
Also Read: Binance Co-Founder Rallies Support Amid Company Controversy
