While Binance has settled with US regulators worth $4.3 million, it is still embroiled in a legal battle with the Securities and Exchange Commission (SEC).
On Tuesday, the crypto exchange made several court filings in which it pushed for the dismissal of the lawsuit.
It claimed that the securities regulator was not interpreting the securities law correctly and that it was engaging in ‘territorial aggrandizement’.
Two filings
According to Binance’s founder, Changpeng Zhao, or CZ, as he is known, the SEC is arguing that there does not need to be an investment or contract, in an ‘investment contract’.
The exchange stated that the complaint filed by the SEC is focused on transactions conducted by customers who purchased tokens from other anonymous individuals via a website and then logged off.
Binance stated that there was no contract with a promoter for investing in a common enterprise.
It further asserted that the regulator was not using a transaction-by-transaction basis for determining whether an investment contract exists, or not.
The American subsidiary of Binance, BAM Trading Services, also accused the SEC in another filing of overreach.
It said that Congress has not granted the SEC oversight of ‘virtual commodities’ yet it claims to have regulatory jurisdiction over them.
The layers of BAM Trading further added that for applying securities law to Binance, they would have to remove the term ‘contract’ from ‘investment contract’.
Third filing
The two filings were made in response to the earlier reply from the SEC, which it issued after Binance filed a motion to dismiss the lawsuit.
In a third filing, Zhao and Binance pushed back against the efforts of the SEC to include the guilty plea of the exchange as part of the settlement it had made with the Department of Justice (DOJ).
According to the exchange’s lawyers, Zhao and Binance had admitted to violating the Bank Secrecy Act, but it had nothing to do with crypto assets being securities under the Exchange Act or Securities Act.
The background
Back in June, the SEC had filed a lawsuit against Binance and its founder and there were a total of 13 charges that were made.
These included not preventing access to Binance.com for US customers, operating as an unregistered clearing agency, broker, and agency, and unregistered sale of crypto assets.
The SEC also alleged that Binance has engaged in commingling of customer funds worth billions of dollars in an account that belonged to another entity Zhao owned called Merit Peak.
Several motions have been filed by the world’s largest crypto exchange by trading volume to get the lawsuit dismissed.
Binance has argued that the regulatory body does not have any authority to oversee crypto exchange and also accused it of doing a regulatory land grab.
The same argument has also been presented by Coinbase, another leading exchange, in its legal battle with the SEC.