California: Binance Holdings and CEO Changpeng “CZ” Zhao filed court papers Thursday seeking to have a lawsuit against them by the US Securities and Exchange Commission dismissed.
Binance and Zhao, in a 60-page petition, claimed that the agency overstepped its authority in suing them. The SEC alleged a range of allegations, including mishandling customer funds, misleading investors and regulators, and breaking securities rules. In calling to dismiss the lawsuit, Binance and Zhao accused the regulator of attempting to impose penalties retroactively, before it provided any public guidance regarding cryptocurrencies.
“In attempting to claim regulatory power over the crypto industry, the SEC distorts the text of the securities laws,” lawyers for the defendants wrote in the petition.
A spokesperson for the SEC didn’t immediately respond to a request for comment outside normal business hours.
The SEC brought charges against Binance, Binance.US and Zhao in June. All have publicly denied the allegations. The case followed a lawsuit from the US derivatives watchdog in March that alleges Binance and Zhao routinely broke its rules.
Binance and Binance.US have seen their market shares plummet in the subsequent months, partly due to the regulatory crackdown. Binance.US’s CEO left the company earlier this month, a move that coincided with the layoff of about a third of the platform’s workforce.