Binance to face off against US securities regulator in Washington D.C. court

BINANCE is due to square off against the US Securities and Exchange Commission (SEC) in a Washington courtroom this week, in another high-profile hearing involving the agency and a crypto exchange that could define how cryptocurrencies are regulated.

The world’s largest crypto exchange previously asked federal Judge Amy Berman Jackson to toss out a lawsuit the SEC filed in June alleging Binance broke its rules, and is expected to make its case for dismissal before her on Monday.

The regulator accused Binance, its chief executive officer and founder Changpeng Zhao and the exchange’s US arm of artificially inflating its trading volumes, diverting customer funds, failing to restrict US customers from its platform and misleading investors about its market surveillance controls.

It also accused Binance of unlawfully facilitating trading of several crypto tokens the SEC deemed unregistered securities.

The hearing had originally been slated for Friday but was postponed due to snow in the Washington, D.C., area, the court said in a notice. It has been rescheduled for Monday, Jan. 22 at 10 a.m. EST (1500 GMT), the notice said.

The hearing will follow a separate hearing earlier this week in the SEC’s case against rival US crypto exchange, Coinbase, which was also accused by the SEC of trading cryptocurrencies that should have been registered.

The SEC has long argued most crypto tokens are akin to securities subject to its oversight, while the crypto sector largely disputes the SEC’s stance. Both cases are expected to help shape the SEC’s authority over the sector.

BAM Trading, the operator of Binance US, has said in court filings that the SEC does not have the authority to oversee crypto assets, an argument similar to that of Coinbase, which is also seeking dismissal of the SEC case.

Binance Holdings last year agreed to pay $4.3 billion to settle with the Department of Justice and Commodity Futures Trading Commission over illicit finance breaches, and Mr. Zhao pleaded guilty to breaking US anti-money-laundering laws. But the SEC’s case is still hanging over the exchange. —