The Securities and Exchange Commission (SEC) is preparing for a legal confrontation with Binance US, the American branch of the global cryptocurrency exchange, as the regulatory dispute escalates.
Binance US, expressly established to cater to U.S. customers and comply with local rules and regulations, stated in a recent post on X that it is prepared to contest the SEC’s allegations in Court.
By offering unregistered investment products and engaging in anti-fraud breaches, the SEC has accused Binance US of violating securities laws.
On Friday, the Court determined that the SEC’s case against Binance was valid. The United States will persist. The platform stated, “We were adequately equipped to handle this situation and eagerly anticipate the progression of this case through the legal system.”
Binance US Says it Maintains 1:1 Reserves for All User Assets
Binance US stated in its post that it maintains 1:1 reserves for all customer assets and implements robust compliance and risk programs to ensure the security and integrity of the platform.
“We have consistently employed the restricted guidance that the SEC has provided to the crypto industry to conduct our business compliant.”
Nevertheless, the exchange criticized the SEC’s regulatory approach, referring to it as “regulation by enforcement.”
Under the current stewardship of Chair Gary Gensler, Binance US has also suggested that politically motivated actions drive the challenges it is currently facing.
Binance US has yet to persuade a U.S. court to invalidate the majority of the SEC’s claims against it despite its confidence in its legal status.
The SEC’s allegation that Binance CEO Changpeng “CZ” Zhao acted as a “control person” was upheld in the court filing on June 28. This decision dealt a significant setback to Binance’s efforts to have the claim dismissed.
Furthermore, Judge Amy Berman Jackson determined that the prosecution of claims concerning anti-fraud violations, the sale of BNB tokens after Binance’s initial coin offering, and the staking program will proceed.
The SEC did not achieve an absolute victory with the ruling.
The claims regarding BNB secondary market sales and all sales associated with the Binance USD (BUSD) stablecoin were dismissed by Judge Jackson.
She cited Judge Analisa Torres’ judgment in the SEC’s case against Ripple as a basis for dismissing the SEC’s claim regarding BNB secondary market sales in her decision.
Binance Maintains Its Preeminent Position
Despite its legal obstacles, Binance maintains its status as the world’s largest cryptocurrency exchange. The company manages assets exceeding $100 billion and has a user base of over 200 million.
Binance reported a user base of approximately 130 million just two years ago, in 2022.
The exchange had increased its user base by 40 million by 2023, increasing the total number of users to 170 million.
Binance acquired at least 30 million new users in the first half of 2024, which is truly remarkable.
In May, the Financial Intelligence Unit of India (FIU-IND) disclosed that Binance had effectively registered with the regulatory body, marking its return to the country following a series of regulatory obstacles.
Previously, the exchange disclosed that it had acquired a license from VARA, the regulatory body in Dubai, which would permit the platform to serve retail, institutional, and qualified clients.
