News - Binance begins with small defeat in court

By Ted Maas

Binance begins with small defeat in court

Laws and regulations
Binance vs SEC

Lawyers for Binance think the jury was influenced by a press release from the SEC - and therefore filed a lawsuit. The court sees it differently and dismisses the motion.

The federal judge presiding over the SEC's case against Binance has denied a motion by the major exchange. In this motion, Binance complained about a press release published by the U.S. regulator regarding securities. In particular, Binance's lawyers objected to the language. In it, the SEC described the alleged misuse of customer funds by Binance founder Changpeng "CZ" Zhao.

Binance v. SEC: Here's what happened

In the press release, SEC enforcement director Gurbir Grewal explains how CZ would have been involved in the transactions. Specifically, it states:

"Given that Changpeng Zhao and Binance have control over customers' assets, and thus had the ability to commingle or divert them, a trading ban is essential for investor protection.

Binance's lawyers argue that this text could influence the jury. The submitted statement says the following:

'The SEC's press release appears designed to create unwarranted confusion in the marketplace, which may result in customers being harmed rather than protected. There is also a risk that the jury will be influenced by misleading descriptions regarding the defendants.’

However, as the federal judge ruled (para. 87), it was not clear that the SEC's argument would materially affect the trial. Therefore, she denied the motion the day before yesterday, June 26 - a minor defeat for Binance.

Wash trading on a large scale?

Meanwhile, the allegations against Changpeng Zhao are hurting the crypto exchange's image. False trading volumes, inflated prices: Binance allegedly engaged in wash trading for years. At least, that's what the SEC accuses it of. So far, the world's largest crypto exchange has not published a counter statement, but has sharply denied all allegations. "We will fiercely defend ourselves," Binance said in an official statement.

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