Binance to Seek Dismissal of SEC Lawsuit

Cryptocurrency exchange Binance is scheduled to go head-to-head with the Securities and Exchange Commission (SEC) on Monday (Jan. 22).

Binance had previously sought the dismissal of the SEC’s lawsuit and is set to present its case before federal Judge Amy Berman Jackson on Monday. The hearing was rescheduled from Friday (Jan. 19) due to inclement weather in Washington, D.C., Reuters reported Friday.

The SEC filed its lawsuit against Binance in June, accusing the exchange of several violations, according to the report. Among the suit’s allegations were artificially inflating trading volumes, diverting customer funds, allowing U.S. customers on its platform and misleading investors about market surveillance controls. The SEC also claimed that Binance facilitated trading of unregistered securities.

This legal battle follows a similar case involving the SEC and Coinbase, another major U.S. crypto exchange, the report said. Both cases are expected to shape the SEC’s authority over the crypto sector.

BAM Trading, the operator of Binance.US, has argued in court filings that the SEC lacks jurisdiction over crypto assets, echoing Coinbase’s argument in seeking dismissal, per the report. Binance has also maintained that the SEC has not provided evidence of fraud committed by the exchange.

While Binance has reached settlements with other agencies, including the Department of Justice and the Commodity Futures Trading Commission (CFTC), the SEC’s case still hangs over the exchange, according to the report.

Binance has been reluctant to settle with the SEC, as doing so would imply that the tokens in question are securities, potentially impacting its business model, the report said.

This lawsuit is part of a series of cases brought by the SEC against crypto firms in recent years, per the report. The SEC has consistently argued that most crypto tokens are securities falling under its oversight, while the crypto sector disputes this stance.

Despite the legal and regulatory troubles it has faced, Binance saw its user base grow by 30% in 2023, with the addition of 40 million customers.

“Importantly, we saw a particularly strong uptick in inflows coming from institutional investors,” Binance CEO Richard Teng said in the company’s year-end report, released Dec. 28.

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.