Binance Holdings and its ex-CEO Changpeng Zhao are pushing back against the U.S. Securities and Exchange Commission’s (SEC) effort to incorporate the company’s Department of Justice (DOJ) admission of guilt into the SEC’s ongoing legal battle with the crypto exchange.
In a recent filing with the U.S. District Court for the District of Columbia, dated Dec. 12, Binance argued against the SEC’s proposal to include its $4.3 billion guilty plea and settlement with the DOJ as part of the ongoing SEC lawsuit. The exchange deemed this move procedurally inappropriate and argued it should be disallowed.
The dispute with the SEC dates back to June 5, 2023, when the regulator leveled 13 charges against Binance, including allegations of improper management of customer assets on Binance.US and the misallocation of customer funds.
In a separate November agreement, Binance resolved the DOJ’s investigation by agreeing to pay $4.3 billion in penalties while complying with U.S. regulations. Despite not being part of the formal agreement, the SEC asserted that Binance’s and Zhao’s admissions in the DOJ settlement should be considered relevant in the SEC’s case.
The SEC’s stance is that the settlements prove Binance’s awareness of its operations within the U.S. and its service to U.S. customers. Binance, however, contends that the SEC has failed to demonstrate the relevance of the DOJ settlements to the SEC’s “faulty claims” against them.
In their Dec. 12 submission, Binance stressed that the SEC’s notice doesn’t support the allegations made in the June 2023 lawsuit, stating:
The SEC Notice is an impermissible supplemental brief that identifies no new “authority” and instead attempts to introduce new factual information and arguments. This alone is reason to disregard it.
Binance further emphasized that seeking judicial notice is not equivalent to amending a complaint. The firm suggested that the SEC’s reliance on resolutions with other agencies implies a shortfall in the SEC’s regulatory authority understanding.