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by Mike Caswell

Canadian cryptocurrency billionaire Changpeng Zhao has asked a U.S. federal judge to throw out civil charges against him and Binance Holdings Ltd., the cryptocurrency exchange that he runs. He says that the SEC is distorting securities laws to assert jurisdiction in an area where it has none. There are no specific laws dealing with cryptocurrencies, and the SEC is improperly trying to apply 90-year-old regulations, he contends.

Mr. Zhao is responding to a case in which the SEC claims that he and Binance have been running an unregistered exchange. His operation, which has handled as much as $9.58-trillion in trading, has been operating in the U.S. with no oversight or controls over billions of dollars in assets, the SEC contends. (All figures are in U.S. dollars.) The SEC is looking to permanently ban Mr. Zhao from the U.S. markets.

For his part, Mr. Zhao contends that the SEC's case is one of regulatory overreach. In a motion filed on Thursday, Sept. 21, he says that the SEC has only recently claimed authority over crypto assets, an "about-face from its prior statements." The SEC's chairman previously admitted as much in 2019 after the regulator approved an initial public offering for a cryptocurrency exchange called Coinbase, saying that there was no regulatory framework for the sector and that only Congress could confer that authority.

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