Key takeaways:
- The US SEC has decided to incorporate Binance Holdings’ admission of guilt to the DOJ in its own legal procedures.
- The settlements show that Binance knew it was doing business in the US, catering to US clients, and using US infrastructure for transactions.
The US Securities and Exchange Commission (SEC) has decided to incorporate Binance Holdings’ admission of guilt to the Department of Justice (DOJ) in its own legal procedures. Binance Holdings and its former CEO, Changpeng Zhao, have responded to this development.
The SEC’s attempt to incorporate the $4.3 billion guilty plea and settlement agreement with the DOJ in the ongoing lawsuit, according to Binance, was procedurally wrong and shouldn’t have been permitted in a filing made on December 12 to the US District Court for the District of Columbia.
On June 5, 2023, the SEC filed a lawsuit against Binance, alleging 13 violations of securities laws, including improper management, mixing, or redirection of customer assets by Zhao and Binance on Binance US. This legal dispute is still ongoing.
In November, the Department of Justice concluded its investigation into Binance by reaching a separate settlement with the firm and its former CEO. Through the agreement, Binance was spared $4.3 billion in fines and was able to carry on with business as usual under US law.
The SEC argued that the federal court supervising its case against the exchange needed to take into account the declarations and admissions made by Binance and Zhao in the November 21 settlement, even though they were not expressly included in the agreement.
According to the SEC, the settlements show that Binance knew it was doing business in the US, catering to US clients, and using US infrastructure for transactions.
Binance countered that the SEC had not demonstrated how any of the agreements made with the DOJ related to the SEC’s “erroneous allegations” against Zhao and Binance Holdings.
Binance claimed that the SEC letter did not support its claims in the June 2023 case in court documents filed on December 12, 2023. It stated:
“The SEC Notice is an impermissible supplemental brief that identifies no new “authority” and instead attempts to introduce new factual information and arguments. This alone is reason to disregard it.”
A court notice is not a replacement for revising a complaint, the company stated. The corporation made a statement claiming that the SEC’s attempt to use resolutions as leverage with other agencies shows that it lacks knowledge of any relevant regulatory authority.
