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- Binance and Zhao question the SEC’s notice, claiming it lacks relevance.
- Defendants criticize the SEC’s use of Zhao’s plea agreement, asserting it is “deeply misguided.”
- The SEC selectively omits crucial information, according to the filing.
Binance and former CEO Changpeng Zhao filed a response to the U.S. Securities and Exchange Commission’s (SEC) recent notice of supplemental authority filed on December 8, describing it as an “impermissible supplemental brief that identifies no new authority.”
The filing response claimed that the SEC’s notice was improper and impermissible, citing that the SEC failed to demonstrate the relevance of the resolutions with the Department of Justice to the SEC’s claims against Binance and Zhao.
In the SEC’s notice, reference was made to the recent plea agreement between Zhao and U.S. officials after Zhao pleaded guilty to breaching anti-money laundering rules, suggesting that these developments provided additional grounds for the court to reject the joint motion.
The SEC accused Binance and Zhao of knowingly taking steps to circumvent U.S. law. The defendants countered this argument, saying that the SEC’s attempt to conflate different statutory schemes by calling them all U.S. law is unavailing.
The defendants criticized the SEC’s use of the plea deal as “deeply misguided,” arguing that the facts in the agreements with the Department of Justice did not necessarily imply fair notice of the SEC’s theory that the crypto assets in question were securities. They emphasized that violating the Bank Secrecy Act, as indicated in the plea agreements, did not automatically support the SEC’s position.
Moreover, the defendants disputed the SEC’s assertion that Binance admitted to using a U.S.-based technology service provider, contending that the SEC selectively omitted relevant information. According to the defendants, the full context of the statement revealed that the service provider hosted and operated Binance.com in Japan.
The defendants concluded by claiming that the SEC’s notice should be disregarded and that it didn’t undermine any of Binance’s or Zhao’s arguments for dismissal.
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