The US Securities and Exchange Commission (SEC) believes that a $4.3 billion legal settlement between Binance and the US Department of Justice has strengthened the case the cryptocurrency exchange is facing. The SEC plans to proceed with the lawsuit against the world’s largest crypto exchange.
On December 8th, despite not being a part of the settlement, the SEC requested the federal court to consider admissions made by Binance and its former CEO Changpeng Zhao on November 21st. Binance and Zhao, on the other hand, requested the dismissal of the SEC’s case.
In the lawsuit filed by the SEC in June, Binance and Zhao are accused of misusing customer funds, misleading investors and regulators with false information, and violating securities regulations. The SEC also contested Binance’s defense that they had no legal basis.
According to the SEC, Binance’s argument threatens existing precedent decisions that are vital for the operation of the country’s securities laws. The SEC alleges that Binance’s approach proposes a rigid framework that is not compatible with the current legal system.
On the other hand, after former CEO Zhao admitted to his wrongdoings, US District Judge Richard Jones decided on December 7th, 2023, that Zhao must remain in the US until he completes his sentence. Zhao, after resigning from his position as CEO of Binance, faces up to 10 years in prison, but is expected to receive a maximum of 18 months imprisonment and has also agreed to pay a $50 million fine as part of the settlement.