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- Crypto firm Paradigm filed an amicus brief to challenge the SEC lawsuit against Binance.
- Paradigm argued that the SEC’s interpretation of securities laws to crypto-assets is flawed.
- The court has extended the legal proceedings after Binance and SEC fell short on the court’s consent order requirements.
A recent court filing revealed Crypto investment firm Paradigm filed an amicus brief to challenge the U.S. Securities and Exchange Commission’s lawsuit against cryptocurrency Exchange Binance. Paradigm’s move follows a similar filing by the company in late September in the ongoing case.
Notably, Paradigm claims the U.S. Securities and Exchange Commission’s categorization of crypto token sales as investment contracts threatens the crypto ecosystem. The firm also noted its concerns around the implication of that categorization for entities in the U.S. and other jurisdictions.
Paradigm argued further that the SEC’s approach is based on the incorrect assumption that a crypto asset is inevitably a security owing to its speculative potential. Instead, they argued that the Securities Law’s “investment contract” concept should apply to regular asset transactions.
While challenging the SEC’s jurisdiction over cryptocurrencies, Paradigm argued that the ambiguity around crypto assets underscores the need for Congress’s intervention. According to Paradigm, a regulatory framework for cryptocurrencies will cut short the excesses of SEC, which has drawn criticism from crypto circles and Congress.
Meanwhile, Judge Faruqui recently extended the legal proceedings after the parties failed to agree on document discovery and depositions. While noting his disappointments in the parties, he further asked that they comply with the requirements set in the court’s previous consent order.
On its part, the SEC claimed during the Joint Status Report that Binance had intentionally withheld important documents. The Wall Street Regulator continued that the crypto exchange has also not been forthcoming in its plans to abide by the court’s order and deliver the requested records.
However, Binance countered that the regulator had imposed unreasonable demands since the hearing on September 18. The court has extended the legal proceedings and ordered the parties to file their joint status report by October 30.
The SEC’s ongoing lawsuit ropes the tripartite of Binance, chief executive officer Changpeng Zhao, and its U.S.-arm Binance U.S. in a series of money laundering and securities law violation allegations.
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