Binance used ‘tortured’ interpretation of law in bid to toss suit, says SEC
Binance’s arguments used in its motion to dismiss a lawsuit from the United States securities regulator relies on an incorrect legal analysis and have no basis in law, the regulator has argued.
In a Nov. 7 court filing the SEC rebuffed Binance’s earlier bid to toss the regulator’s suit saying no court has adopted Binance’s “tortured interpretation of the law.”
The SEC sued Binance in June alleging it, Binance.US and its founder Changpeng “CZ” Zhao sold unregistered securities and failed to register as an exchange in the United States.
Binance argued the SEC failed to introduce crypto guidelines, misinterpreted securities laws and applied them to crypto and called the suit an overstep of its authority.
In its latest rebuttal, the SEC claimed Binance “never complied” with federal securities laws which was “a deliberate choice.”
“Binance’s Chief Compliance Officer crudely but succinctly summed up this case when he admitted that Binance was ‘operating as a fking unlicensed securities exchange in the USA bro.’ He was right.”
It added Binance’s arguments that compared crypto to “supermarket items like oranges […] are absurd” and claimed the crypto exchange’s crypto sales are investment contracts under the Howey test.
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The regulator reiterated its claims the BNB (BNB) initial coin offering violated securities laws and Binance USD (BUSD) along with the yield-bearing staking, Vault and Earn programs are investment contracts.
It also rebuffed Binance’s argument that the suit violated the major questions doctrine — a 2022 U.S. Supreme Court ruling saying Congress doesn’t delegate authority to agencies, which other crypto firms have cited in their aim to push back on the SEC’s claimed authority.
The SEC claimed granting Binance’s dismissal request would “dismantle decades of foundational precedent upon which the nation’s securities laws operate” and in its place would be a “rigid framework” that upends the “broad, flexible regime” of the current laws.
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Legal representatives for Coinbase filed a motion for a legal hearing and potential remedies after the SEC failed to comply with FOIA requests.
A coalition of UK trade groups has urged the government to include blockchain and digital assets in its planned “Tech Bridge” collaboration with the US.
The Conservatives have urged Sir Keir Starmer to publish all concerns raised by the security services about the appointment of sacked US ambassador Peter Mandelson.
Shadow cabinet office minister Alex Burghart said his party would push for a vote in parliament demanding the government reveal what issues the security services had in relation to Lord Mandelson’s relationship with the disgraced sex offender and financier Jeffrey Epstein.
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Peter Mandelson was sacked as the UK’s ambassador to Washington on Thursday. Pic: PA
It comes after Sky News’ deputy political editor Sam Coates revealed that Number 10 appointed Lord Mandelson to the Washington role despite the security services’ reservations about the move.
Mr Burghart said material from the security services is not usually made public, but that a substantial amount of information was already in the public domain.
He told Sky News Breakfast: “What we’re going to do is we’re going to try and bring a vote in parliament to say that the government has to publish this information.
“It will then be up to Labour MPs to decide whether they want to vote to protect Peter Mandelson and the prime minister or make the information available.”
Mr Burghart said he had spoken to Labour MPs who were “incredibly unhappy about the prime minister’s handling of this”, and that it would be “very interesting to see whether they want to be on the side of transparency”.
Tory leader Kemi Badenoch said she believed Lord Mandelson’s appointment revealed that the prime minister “has very bad judgment”.
“It looks like he went against advice, security advice and made this appointment…and what we’re asking for is transparency.”
The Liberal Democrats have also called for parliament to be given a role in vetting the next US ambassador.
“I think it will be right for experts in foreign affairs on the relevant select committee to quiz any proposal that comes from 10 Downing Street, and so we can have that extra bit of scrutiny,” the party’s leader Ed Davey told broadcasters.
The former UK ambassador to France, Lord Ricketts, said the government should not be “rushing into an appointment” to replace Lord Mandelson.
“I would urge the government to take their time, and I would also make a strong case to the government to go for a career diplomat to steady the ship after this very disruptive process,” he said.
Labour MP Chris Hinchcliff posted on X that the former US ambassador should also be removed from the House of Lords.
Nigel Farage said Sir Keir’s decision to appoint Lord Mandelson as UK ambassador to the US was a “serious misjudgement” by the PM.
“We don’t yet know what the intelligence briefings would have said, but it looks as though Morgan McSweeney, the prime minister’s right-hand man, and the prime minister, ignored the warnings, carried on,” he said.
“He was then reluctant to get rid of Mandelson, and he’s now left himself in a very vulnerable position with the rest of the parliamentary Labour Party.
“It is about the prime minister’s judgement, but it is also about the role that Morgan McSweeney plays in this government.”
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Reform UK leader Nigel Farage says Keir Starmer ignored the warnings about Lord Mandelson.
The timing of the sacking comes ahead of Donald Trump’s state visit next week, with the US president facing questions over his own ties with Epstein.
The prime minister sacked Lord Mandelson on Thursday after new emails revealed the Labour grandee sent messages of support to Epstein even as he faced jail for sex offences in 2008.
In one particular message, Lord Mandelson had suggested that Epstein’s first conviction was wrongful and should be challenged, Foreign Office minister Stephen Doughty told MPs.
The Foreign Office said the emails showed “the depth and extent of Peter Mandelson’s relationship with Jeffrey Epstein is materially different from that known at the time of his appointment”.
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Mandelson exit ‘awkward’ before Trump state visit
Downing Street has defended the extensive vetting process which senior civil servants go through in order to get jobs, which has raised questions about whether or not they missed something or Number 10 ignored their advice.
The prime minister’s official spokesman also said yesterday that Number 10 “was not involved in the security vetting process”.
“This is managed at departmental level by the agency responsible, and any suggestion that Number 10 was involved is untrue,” he told reporters.
Asked repeatedly if any concerns were flagged to Downing Street by the agencies that conducted the vetting of Lord Mandelson, he did not dismiss the assertion, repeating that Number 10 did not conduct the vetting.
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Speaking to Sky News this morning, Scotland Secretary Douglas Alexander said his reaction to the publication of the emails was one of “incredulity and revulsion”.
He said he was “not here to defend” Lord Mandelson but said the prime minister “dismissed” the ambassador when he became aware of them.
The cabinet minister said Lord Mandelson was appointed on “judgement – a judgement that, given the depth of his experience as a former trade commissioner for the European Union, his long experience in politics and his policy and doing politics at the highest international levels, he could do a job for the United Kingdom”.
“We knew this was an unconventional presidential administration and that was the basis on which there was a judgement that we needed an unconventional ambassador,” he said.
Mr Alexander added: “If what has emerged now had been known at the time, there is no doubt he would not have been appointed.”
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