The SEC's lawsuit alleges that Binance violated its rules. The legal dispute is one of the last major US legal challenges that Binance is fighting. The company previously settled with the Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) for $4.3 billion over charges related to illegal financial activities. In connection with these settlements, Binance founder Chanpeng Zhao also admitted to violating US anti-money laundering laws.
Despite these settlements, the SEC's case remains unresolved. In June last year, the SEC charged Binance, along with Zhao and the exchange's US arm, with various violations. These included charges of artificially inflating trading volumes, misappropriating customer funds, failing to block US customers from accessing the platform, and deceiving investors about market surveillance measures.
In addition, the SEC accused Binance of facilitating the trading of certain crypto tokens it deemed to be unregistered securities, thereby operating illegally.
The outcome of this case before Federal Judge Amy Berman Jackson could significantly impact the regulatory framework for cryptocurrencies in the United States. Binance's legal team is expected to present their arguments as to why the case should be dismissed. The court's decision could set a precedent for how digital assets will be treated under US securities laws.