In a courtroom in Washington, D.C., the world's largest cryptocurrency exchange, Binance, is set to clash with the US Securities and Exchange Commission (SEC) this Monday. This pivotal hearing has the potential to significantly influence the regulatory landscape for cryptocurrencies.
Having previously petitioned Federal Judge Amy Berman Jackson, Binance sought to dismiss a lawsuit filed by the SEC in June, alleging violations of agency rules. The cryptocurrency exchange is anticipated to submit its motion to dismiss the case today.
The SEC's accusations against Binance, its CEO and founder Changpeng Zhao, and the exchange's US division include artificially inflating trading volumes, mishandling customer funds, failing to restrict US customers from its platform, and providing misleading information about market surveillance controls. Furthermore, the regulator contends that Binance unlawfully facilitated the trading of several cryptocurrencies considered unregistered securities.
Originally slated for Friday, the hearing was postponed due to snowfall in the Washington, D.C. area and is now rescheduled for this Monday, January 22, at 6:00 PM UTC+3 (10:00 AM EST).
This legal battle follows a separate lawsuit filed earlier this week by the SEC against Coinbase, a rival US cryptocurrency exchange. Coinbase, too, faces accusations of trading cryptocurrencies that should have been registered.
The SEC has long maintained that most cryptocurrencies resemble securities and fall under its supervision—a standpoint vehemently contested by the cryptocurrency industry. These cases are expected to shape the SEC's authority within the industry.
BAM Trading, the operator of Binance.US, argued in court filings that the SEC lacks the authority to oversee crypto assets—a stance shared by Coinbase, which also seeks the dismissal of the SEC lawsuit.
Binance has emphatically stated that the US regulator failed to provide evidence of fraudulent activities.