- Due to a snowstorm in the region, Binance and the U.S. Securities and Exchange Commission (SEC) will not be able to proceed with their previously scheduled hearings.
- Binance is also accused of violating Identity Verification Rules and securities laws.
- When the Binance hearing eventually takes place, the exchange can argue that the SEC’s definition of what constitutes a security is flawed.
The hearing between leading cryptocurrency exchange Binance and the U.S. Securities and Exchange Commission (SEC) has been postponed.
Adjournment of the SEC and Binance Case Hearing
Due to a snowstorm in the region, Binance and the U.S. Securities and Exchange Commission (SEC) will not be able to proceed with their previously scheduled hearings. The U.S. Securities Regulation Committee had filed a lawsuit against Binance on June 5, 2023, accusing the exchange of operating illegally in the U.S. and misleading customers.
Binance is also accused of violating Identity Verification Rules and securities laws. The market regulator had also labeled cryptocurrencies traded on Binance, including Cardano (ADA), Polygon (MATIC), and Solana (SOL), as unregistered securities.
This matter has been ongoing in court since then, and a hearing was scheduled for January 19. However, the adverse weather conditions in the U.S. significantly impacted the situation, leading to the closure of the court on Friday. It should be noted that Binance, Binance.US, and former CEO Changpeng ‘CZ’ Zhao have filed a motion to dismiss this case on prejudicial grounds.
They argued that the SEC failed to credibly assert whether any token, BNB vault, or simple earnings is a security, that the claim regarding the BNB offering has expired, and that the SEC’s arguments unjustly extended securities laws beyond their jurisdiction overseas.
This comes at a time when the largest cryptocurrency exchange’s U.S. arm attempted to dismiss a lawsuit filed by the SEC. It happened just before attorneys Sheehan H. Band, Levi Giovanetto, Daniel J. Davis, Christian Kemnitz, and David Luger joined the legal team preceding the Binance hearing.
SEC May Have Exceeded Its Authority
While the postponement does not mean the dismissal of the case, when the Binance hearing eventually takes place, the exchange can argue that the SEC’s definition of what constitutes a security is flawed, similar to a situation Coinbase faced. Additionally, Binance may raise the issue of Congress authorizing the SEC’s counteraction. According to a filing by Binance in December, “The SEC stayed on the sidelines for good reason – unlike the CFTC, the SEC lacks legal authority over exchange sales of crypto assets.”
This Binance hearing appears to share several similarities with Coinbase. After months of requesting a clear regulatory framework for the cryptocurrency industry in the United States, Coinbase stated that regulating crypto was beyond the regulator’s jurisdiction.
