Binance Holdings Limited (BHL) and the U.S. Securities and Exchange Commission (SEC), BHL, and its CEO, Changpeng Zhao, have fired back at the SEC with a compelling counter-argument.
This latest development follows the SEC’s introduction of what BHL deems to be extraneous arguments in a recent court document.
Challenging the SEC’s legal strategy
BHL’s legal team has taken a firm stance against the SEC’s “Notice of Supplemental Authority,” submitted on Dec. 8.
In their response, BHL and Zhao slam the SEC for what they describe as a procedural misstep, arguing that the notice inappropriately introduces new information and arguments at this litigation stage.
BHL contends that the SEC’s attempt to leverage past dealings with the Department of Justice and FinCEN bears little relevance to the ongoing case, particularly concerning the classification of crypto assets under the Securities Act and Exchange Act.
A borderless battle
The response from BHL and Zhao also dives into the thorny issue of extraterritoriality, a key point of contention in applying U.S. securities laws to global crypto operations.
They argue that the SEC’s reliance on resolutions related to the Bank Secrecy Act (BSA) misinterprets the territorial scope of the securities laws.
BHL maintains that the transactions in question did not occur within the U.S., hence falling outside the jurisdiction of U.S. securities laws.
They assert that the SEC’s approach wrongly extends its regulatory reach, trying to govern transactions and activities that occurred beyond U.S. borders.