CZ filing says SEC can’t tell securities from Beanie Babies
Former Binance CEO Changpeng Zhao has moved to dismiss the Securities and Exchange Commission’s (SEC) amended lawsuit, claiming that the regulator can’t differentiate between crypto securities and Beanie Babies.
Binance and Zhao filed the motion to dismiss yesterday while alleging the SEC’s new filing “refuses to articulate any standard for courts, litigants, or market participants to know which crypto-asset transactions qualify as investment contracts, and which do not.”
The SEC filed the lawsuit in June 2023 and amended it last month. It names Binance, BAM Trading Services Inc., and BAM Management US Holdings, alongside Zhao, as defendants.
According to the motion to dismiss, winners and losers are being chosen “arbitrarily” by the SEC and “its non-test cannot differentiate securities from Beanie Babies at the pleading stage.” The filing then singles out five types of transactions that it believes the SEC has misinterpreted within its fresh allegations.
Read more: Binance founder CZ made over $25 million per day while in prison, report
The filing also wants to dismiss the SEC’s disgorgement request, calling it “meritless” and suggesting it would streamline the case by “avoiding burdensome and irrelevant discovery into Defendants’ finances.”
It also asks the court to class the SEC’s request to limit Zhao’s participation in securities markets via BAM or Binance entities as “Moot.” Zhao was already banned from managing the Binance business as a part of his plea agreement.
Finally, its conclusion stated that, after 89 pages of court guidance, a hundred new allegations, and 16 months of expedited discovery, “the SEC’s amended claims still fail as a matter of law.”
“The problem is with the SEC’s legal theories, not the facts at its disposal,” it claimed.
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