Binance, the world’s largest crypto asset trading platform, has filed a motion against the U.S. Securities and Exchange Commission (SEC) for allegedly making misleading statements in a press release regarding a securities lawsuit against Binance and its founder, Changpeng Zhao (CZ).
The motion, filed on June 21 in the U.S. District Court for the District of Columbia, claims that the SEC’s press release on June 17 contained statements that were “unsupported by evidence” and “inconsistent with the rules of professional conduct”. The motion also requests that the SEC comply with these rules and refrain from making further public statements that may affect the court proceedings.
The SEC’s press release announced that it had filed 13 charges against Binance, Binance.US, CZ, and other entities affiliated with Binance for various securities law violations, including operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and offering and selling unregistered securities, such as Binance’s own tokens (BNB and BUSD), crypto-lending products, and staking services.
Tekedia Mini-MBA edition 15 (Sept 9 – Dec 7, 2024) has started registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
The press release also accused CZ and Binance of secretly allowing high-value U.S. customers to trade on Binance.com, which is not registered with the SEC, and of secretly controlling Binance.US’s operations behind the scenes. The press release further alleged that CZ and Binance could “commingle customer assets or divert customer assets as they please”, including to an entity owned by CZ called Sigma Chain.
Binance’s motion disputes these allegations and cites a transcript of a June 13 hearing in which an SEC counsel admitted that there was no evidence of Binance.US customer assets being sent offshore or commingled with other assets. The motion also argues that the SEC’s press release was designed to “introduce unwarranted confusion into the marketplace” and to “taint the jury pool” with misleading descriptions of the evidence.
Binance’s motion is part of its ongoing defense against the SEC’s lawsuit, which was filed on June 5. The lawsuit is one of several regulatory actions that Binance has faced in recent months, as authorities around the world have increased their scrutiny of the crypto industry. Binance has maintained that it complies with all applicable laws and regulations and that it cooperates with regulators.
Interestingly, Binance has announced the launch of a regulated exchange in Kazakhstan. The new platform, called Binance Kazakhstan, will allow users to buy and sell cryptocurrencies with Kazakhstani tenge (KZT) and other fiat currencies. Binance Kazakhstan is a joint venture between Binance and Digital Financial Assets (DFA), a local company that provides blockchain and fintech solutions. The exchange will operate under the supervision of the Astana International Financial Centre (AIFC), a special economic zone that offers a favorable regulatory environment for crypto businesses.
According to Binance, the launch of Binance Kazakhstan is part of its global expansion strategy and its commitment to support the development of the crypto industry in emerging markets. Binance Kazakhstan will offer users access to Binance’s global liquidity pool, as well as local payment methods and customer support.
Binance CEO Changpeng Zhao said: “We are excited to bring Binance’s world-class technology and services to the people of Kazakhstan. We believe that Binance Kazakhstan will contribute to the growth and innovation of the local crypto ecosystem and foster financial inclusion for more people.”
DFA CEO Madi Saken said: “We are proud to partner with Binance to launch Binance Kazakhstan, the first regulated crypto exchange in the country. We share Binance’s vision of democratizing access to digital assets and providing a safe and reliable platform for our customers.” Binance Kazakhstan is expected to launch in the third quarter of 2023, subject to regulatory approval.