Key Takeaways
- The SEC countered Eeon’s request, pointing out that the Securities Exchange Act prohibits private litigants from intervening in such cases, rendering Eeon’s request impermissible.
- Binance highlighted the lack of consent from the SEC and Eeon’s failure to establish itself as a legitimate party of interest,
The United States Securities and Exchange Commission (SEC) and cryptocurrency exchange Binance have taken a united stance against entity “Eeon,” which sought to intervene on behalf of customers in the SEC’s ongoing case against the crypto exchange. Both parties have objected to Eeon’s request, citing that it fails to meet the necessary legal requirements for intervention and lacks consent.
The dispute has unfolded in the U.S. District Court for the District of Columbia, where Eeon attempted to intervene in the lawsuit, claiming that the interests of Binance’s customers were not adequately represented by the SEC and the exchange’s attorneys. Eeon argued that the SEC’s actions worsened the situation for investors, accusing the regulatory body of wrongly implicating customers in money laundering activities.
It further contended that offshore fund transfers are legitimate practices, distinct from money laundering, commonly used by various entities, such as e-commerce platforms, freelance services, consulting firms, small export companies, and travel agencies, engaged in international money transfers.
However, the SEC countered Eeon’s request, pointing out that the Securities Exchange Act prohibits private litigants from intervening in such cases, rendering Eeon’s request impermissible. The agency argued that Eeon’s participation would have minimal impact, as their claims aligned with those of the defendants and failed to meet the necessary requirements for intervention. Moreover, the SEC noted that Eeon’s counterclaims were contradictory in nature, further undermining their legitimacy.
Binance also submitted its grounds for dismissing Eeon’s petition, highlighting the lack of consent from the SEC, Eeon’s failure to establish itself as a legitimate party of interest, and its inability to meet the necessary legal prerequisites for intervention.
In early June, SEC had filed a lawsuit against Binance alleging that the exchange and its founder Changpeng Zhao worked to attract U.S. customers to its unregulated international exchange, commingled investor funds with their own, and violated securities laws.
