Binance vs SEC: Court Hearing Delayed Due to Weather

The legal battle between Binance, the world’s largest cryptocurrency exchange, and the U.S. Securities and Exchange Commission (SEC) has been postponed due to a snowstorm that closed the courthouse on January 19, 2024. The hearing, which was scheduled to take place on that day, has been rescheduled to Monday, January 22, 2024 at 10:00 a.m., according to a minute order published by the court.

The hearing is expected to be a crucial one, as Binance will seek to dismiss the SEC’s case against it, arguing that the regulator has no jurisdiction over its activities and that it has not committed any fraud or violation of securities laws. Binance is also reportedly unwilling to settle with the SEC out of court, as it did with other U.S. agencies, such as the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ), in the past.

According to a report by Reuters, citing anonymous sources, Binance might need to admit that certain cryptocurrencies named in the case are securities to settle with the SEC, which could affect the company’s business model and reputation. Binance offers a wide range of services and products related to cryptocurrencies, such as trading, lending, staking, mining, and more. Some of these products may involve securities, according to the SEC’s definition, which requires registration and compliance with the agency’s rules.

The SEC filed charges against Binance and its former CEO, Chagpeng Zhao, also known as CZ, on June 5, 2023, accusing them of operating unregistered exchanges, broker-dealers, and clearing agencies and engaging in the unregistered offer and sale of securities. The SEC claimed that Binance sold securities that are “digital asset securities” under the federal securities laws, without registering them or obtaining an exemption from registration. The SEC also alleged that Binance failed to implement adequate anti-money laundering (AML) and know-your-customer (KYC) policies and procedures, and that it facilitated transactions involving illicit funds and sanctioned entities.

Binance has denied the SEC’s allegations and has maintained that it operates in compliance with the laws and regulations of the jurisdictions where it operates. Binance has also stated that it does not offer any services or products to U.S. residents or citizens, and that it has a separate entity, Binance.US, that is registered and regulated in the U.S. Binance has also hired several former regulators and legal experts to strengthen its compliance and governance capabilities.

The outcome of the hearing could have significant implications for the cryptocurrency industry, as it could set a precedent for how the SEC regulates and enforces its rules on digital assets. The hearing could also affect the price and sentiment of the cryptocurrency market, which has been volatile and bullish in recent months, reaching new highs and attracting more investors and institutions.

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