Binance Holdings and its former CEO Changpeng Zhao have responded to the U.S. Securities and Exchange Commission's (SEC) move to integrate Binance's $4.3 billion guilty plea to the Department of Justice (DOJ) into the SEC's ongoing legal proceedings.
In a filing submitted on December 12 to the U.S. District Court for the District of Columbia, Binance argued that the SEC's attempt to include the DOJ's plea and settlement agreement in the current case was procedurally incorrect and should not be permitted.
The legal battle between Binance and the SEC started on June 5, 2023, when the agency charged the company with 13 securities law violations. These included allegations against Zhao and Binance for managing customer assets on Binance.US and mingling or repurposing targeted customer assets.
In November, the Justice Department reached a separate settlement with Binance and its former CEO, concluding its investigation. As part of the deal, Binance agreed to pay a $4.3 billion fine and continue its operations while complying with U.S. regulations. Although not formally included in the settlement, the SEC aims to have the federal court overseeing the exchange's case consider statements and admissions made by Binance and Zhao in the November 21 settlement.
The SEC argues that the settlement agreement indicates Binance's awareness of operating within the United States, serving American customers, and utilizing U.S.-based infrastructure for transactions. However, Binance countered the SEC's assertion, stating that the resolution with the Department of Justice did not relate to any of the SEC's alleged wrongdoing claims against Binance Holdings and Zhao.
In court documents filed on December 12, 2023, Binance criticized the SEC's notice, claiming it failed to substantiate the agency's contentions from the June 2023 lawsuit. Binance highlighted that the SEC's notice seemed to introduce new factual information and arguments, which was inappropriate as it didn't identify new 'authority' but rather attempted to introduce new factual information and arguments. Moreover, Binance emphasized that the SEC's effort to leverage resolutions from other agencies indicated a lack of information from the SEC regarding appropriate regulatory procedures.
