Binance’s
efforts
to
dismiss
a
U.S.
Securities
and
Exchange
Commission
(SEC)
lawsuit
do
not
have
a
basis
in
the
law,
the
federal
regulator
said
in
a
filing
Wednesday.
The
SEC
pushed
back
against
Binance
and
Binance.US’s
motion
to
dismiss
the
suit
it
brought
earlier
this
summer,
saying
the
motion
relies
on
“distorted”
and
“tortured”
interpretations
of
both
federal
law
and
precedents.
The
SEC
first
sued
Binance
in
June,
a
day
before
suing
Coinbase,
arguing
both
companies
offered
unregistered
securities
to
the
investing
public
(the
Binance
suit
included
some
other
allegations).
Binance,
Binance.US
and
Binance
founder
Changpeng
“CZ”
Zhao
argued
in
a
motion
to
dismiss
that
the
SEC
was
overreaching
from
its
mandate
and
that
it
hadn’t
“plausibly
alleged”
actual
securities
law
violations.
In
Wednesday’s
filing,
the
SEC
said
Binance’s
argument
would
“dismantle
decades
of
foundational
precedent
upon
which
the
nation’s
securities
laws
operate,”
instead
creating
a
new
“rigid
framework”
that
did
not
have
a
basis
in
either
case
precedent
or
existing
law.
Binance’s
sale
of
the
BNB
token
during
an
initial
coin
offering
as
a
fundraising
mechanism
violated
securities
law,
as
did
its
sale
of
Binance
USD
(BUSD)
as
an
investment
contract,
the
SEC
alleged.
Similarly,
staking
and
earn
programs
also
violated
federal
securities
laws,
the
agency
argued.
The
SEC
also
pushed
back
against
an
argument
that
its
lawsuit
violated
the
“Major
Questions
Doctrine,”
a
recent
Supreme
Court
ruling
that’s
quickly
become
a
favorite
of
crypto
companies
facing
litigation
from
the
federal
regulator.
“Defendants
fail
to
explain
why
a
doctrine
intended
to
protect
Congressional
authority
to
make
major
policy
decisions
would
be
served
by
precluding
the
SEC
from
enforcing
the
Congressional
policy
choices
embodied
in
the
securities
laws,”
the
SEC
said.