Cryptocurrency exchange Binance will have its first hearing with the Securities and Exchange Commission (SEC) in court tonight. Binance will seek to dismiss the SEC’s charges, which could potentially cause significant volatility in the cryptocurrency market. Investors are advised to proceed with caution.
Despite reaching settlements with the Department of Justice, the Commodity Futures Trading Commission (CFTC), the Office of Foreign Assets Control (OFAC), and the Financial Crimes Enforcement Network (FinCEN) in November last year, Binance’s lawsuit with the SEC is still ongoing.
During this period, Binance has made multiple requests to dismiss the lawsuit. The first hearing between Binance and the SEC will take place in court at 10 am Eastern Time on January 22 (11 pm Taiwan time). Binance will urge the judge to dismiss the SEC’s charges.
Last June, the SEC filed a lawsuit against Binance Holdings, Zhao Changpeng, and Binance US, among others, with 13 charges, including operating an unregistered exchange, illegally offering and selling securities to US investors, and mishandling customer funds, among others.
While judges usually do not make rulings immediately after a hearing, if the SEC presents unknown evidence in court to attack Binance, it could potentially cause significant volatility in the cryptocurrency market. Investors are advised to proceed with caution.
Following Binance’s settlement with US regulators in November, there was initially a capital outflow as over $1 billion was withdrawn within 24 hours. However, the panic surrounding the capital outflow quickly subsided.
According to Defilllama data, Binance’s net capital inflow has reached $4.6 billion in the two months since then, surpassing its competitors, including OKX with $2.6 billion and Bybit with $1.1 billion.
Last week, the SEC also held a hearing with exchange Coinbase regarding its motion to dismiss the SEC’s lawsuit. After a five-hour hearing, Bloomberg’s senior litigation analyst, Elliott Stein, stated that he believes Coinbase has a high chance of winning and predicts a 70% chance of the SEC’s charges being fully dismissed. Although the backgrounds of the two exchanges are different, it may serve as a reference for the potential outcome of Binance’s lawsuit with the SEC.
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