By George Ward
Ahead of the US District Court hearing for the District of Columbia, Binance.US has asked the court to deny the regulator’s motion to freeze its asset. According to the United States division of the world’s largest crypto exchange, the SEC’s restraining order against its assets would “effectively” lead to the end of its business.
Challenging SEC’s Restraining Order
In the court filing, Binance.US argued that the SEC’s restraining order would end operations for BAM Trading Services Inc., its crypto trading and exchange services company. Besides condemning the commission’s approach to enforcing its regulatory policies, the crypto firm argued that all of the SEC’s claims were false.
According to Binance.US, the SEC has yet to point to a transaction that can be classified as security on the BAM platform. Meanwhile, the security watchdog claimed that it had identified at least 68 crypto assets that are securities.
According to the filing, the regulator’s assumption that all crypto tokens are securities is also not the case. Meanwhile, the Binance.US filing also noted that several digital asset services providers, including BAM, have been operating in the United States for years without any issue with the SEC.
The embattled platform further noted that it has been cooperating with the regulator in its ongoing investigation, which started in December 2020. Furthermore, BAM revealed that the SEC’s probe has resulted in over 700K individual communication and data regarding its daily operations.
It is worth noting that the SEC officially launched a lawsuit against Binance and its subsidiaries earlier this month, alleging that the firm didn’t register as a securities exchange but has allowed its US customers to trade digital assets, which it considered as securities.
Billionaire Slams SEC’s Crypto Vs. Stock Ambiguity
Meanwhile, billionaire investor Mark Cuban has become the latest high-profile individual to lend his support to the digital asset industry. The billionaire investor condemned the commission’s handling of the fledging market’s regulatory affairs.
Taking to his Twitter handle, Cuban noted that the SEC’s high-handedness towards enforcement in the crypto industry is not an encouraging sign. He further compared the regulator’s move in the stock loan industry with digital assets.
He argued that knowing which token can be categorized solely as security is almost impossible. To further prove his claims, Cuban posted a screenshot of a fact sheet produced by the SEC where the commission labeled the stock loan industry as “opaque* and in need of transparency.
The billionaire also highlighted the ambiguity of the SEC’s approach to stock loans and cryptocurrency. He added that the regulator should classify crypto loan issuance as something other than security.
In addition, Cuban believes that the crypto market should be accorded the same process that the SEC implemented in the finance sector. Hence, there would be clarity for crypto players regarding which crypto assets fall under the security category and how best to regulate them.
The billionaire also referenced a June 11 information posted on the commission’s website, stating that it needs to be updated. According to him, this information contradicts the SEC’s approach to enforcing regulations in the crypto market.
Cuban referenced a page on the regulator’s website that explains how the Howkey Test is applied to crypto tokens. However, the regulator hasn’t applied these procedures while enforcing its crypto regulatory policies.
Thus, the business mogul concluded that it becomes difficult to ascertain what constitutes security in the crypto ecosystem, even with the presence of securities lawyers. Since the start of the year, the crypto industry has come under intense scrutiny from the US Securities and Exchange Commission (SEC).
The scrutiny follows various events in the industry in 2022, especially the collapse of the Terra network and FTX crypto exchange. Nevertheless, crypto advocates and industry experts have slammed the regulator’s enforcement style.