Last week, the administration of the exchange Binance filed a motion in U.S. district court as part of its proceedings with the U.S. Securities and Exchange Commission (SEC), insisting that it violated the Securities Act. Binance has asked Judge Amy Berman Jackson to prohibit SEC attorneys from making public statements that Binance and its founder Changpeng Zhao have violated rules for handling U.S. customer deposits.
The regulator alleged that the cryptocurrency platform’s administration mixed billions of customer deposits and its own assets without the ability to adequately segregate them.
Attorneys for Binance have argued that the language used by SEC officials in public statements creates confusion, influences the court’s opinion and misleads the public. And in general, the Commission failed to present the proper evidence in court.
John Reed Stark, the former director of the Securities and Exchange Commission’s legal department, wrote
on Twitter that Binance’s motion for a court order against SEC lawyers represents the first time a cryptocurrency exchange has gone on the open offensive.
But the district judge did not address the merits of Binance’s claim, instead dismissing the motion outright. Judge Jackson explained the decision by saying there was no need to reiterate the ethics obligations of both parties, because it did not affect the merits of the case.
Representatives of the cryptocurrency community saw the court’s reaction as not a good signal about the likely outcome of the future of the Binance and SEC litigation.
<blockquote
“Binance’s motion was pointless to file because it didn’t even justify the legal costs. It looked more like marketing theater than a legal argument,” opined John Reed Stark.
Earlier, a former SEC official said there was an objective possibility of criminal charges being filed by the U.S. Department of Justice (DoJ) against the administration of the cryptocurrency exchange Binance. The SEC and the Commodity Futures Trading Commission (CFTC) have already made significant claims against Binance that involve
fraud, consumer fraud, obstruction of justice and money laundering.