Amidst the legal tug-of-war between Binance Holdings, its former CEO Changpeng Zhao, and the U.S. Securities and Exchange Commission (SEC), the regulator seeks to incorporate Binance’s admission of guilt to the Department of Justice (DOJ) into its own legal proceedings.
Binance has staunchly opposed this move, asserting that the SEC’s attempt to interject the $4.3 billion guilty plea and settlement agreement with the DOJ into the ongoing case is procedurally incorrect and should be dismissed.
The legal scuffle traces back to June 5, 2023, when the SEC accused Binance of multiple securities law violations, alleging mismanagement of customer assets and improper handling of funds on Binance.US, among other charges.
In a separate turn of events, the DOJ negotiated a settlement with Binance and its former CEO in November, closing its investigation into the company. The settlement, entailing a $4 billion penalty, permitted Binance to continue its operations while adhering to U.S. regulations.
While not formally part of the settlement, the SEC aims to bring the statements and acknowledgments made by Binance and Zhao in the DOJ settlement to the attention of the federal court overseeing its case against the exchange. The SEC argues that these settlements underscore Binance’s awareness of its U.S. operations and engagement with U.S. infrastructure for transactions.
Binance rebuts these claims, contending that the SEC failed to establish how the DOJ’s resolutions were relevant to its own allegations against Binance Holdings and Changpeng Zhao.
In its latest court submission on December 12, 2023, Binance criticized the SEC’s notice as an attempt to introduce new factual information and arguments, emphasizing that it lacks substance to substantiate the claims made in the lawsuit from June 2023. The company maintained that the SEC’s reliance on resolutions from other agencies signals a deficiency in relevant regulatory authority.