Binance Holdings and its former CEO, Changpeng Zhao, are responding to the United States Securities and Exchange Commission’s (SEC) request to include Binance’s admission of guilt to the Department of Justice (DOJ) in the ongoing legal case.
In a filing submitted on December 12 to the United States District Court for the District of Columbia, Binance argues that the SEC’s attempt to incorporate the $4.3 billion guilty plea and settlement agreement with the DOJ is procedurally incorrect and should not be allowed.
The legal case between Binance and the SEC began on June 5, 2023, when the agency accused the company of 13 securities law violations, including allegations that Zhao and Binance managed customer assets on Binance.US and mixed or redirected customer assets. In November, the DOJ negotiated a separate settlement with Binance and Zhao, resolving its investigation with a $4.3 billion fine and allowing Binance to continue operations while complying with U.S. regulations. Changpeng Zhao, after pleading guilty, had to resign from his position, pay a fine, and now awaits the continuation of the trial, where the penalty he will face in the United States will be decided.
The SEC persists and deepens its attacks on Binance
Although not formally included in the agreement, it argues that the federal court overseeing its case against the exchange should consider the statements and acknowledgments made by Binance and Zhao in the November 21 agreement. The SEC contends that these acknowledgments demonstrate that Binance was fully aware that it was operating in the United States, serving U.S. customers, and using infrastructure in the country for transactions.
Binance’s response highlights that the SEC has not demonstrated the relevance of the resolutions with the DOJ to the accusations that the SEC has deemed “erroneous.” In other words, for the crypto platform, the accusations lack logical connection or foundation. In documents filed on December 12, the exchange argues that the SEC’s notice does not support the claims in the June 2023 lawsuit and should be dismissed. The company emphasizes that presenting a judicial notice is not a substitute for amending a complaint and suggests that the SEC’s action indicates a lack of information about the proper regulatory authority.
