Binance endures bittersweet moments with SEC as the court proves impartial

Binance Exchange's legal defense team exited the court today in a different mood compared to the last after Judge Amy Berman Jackson ruled in favor of the plaintiff. The hearing came as the largest exchange by trading volume had asked the court to reprimand the US Securities and Exchange Commission (SEC) for defamatory language.

Also Read: Binance motion against the SEC could instigate criminal prosecution, expert says

Binance loses court hearing this time

Binance Exchange enjoyed a victory recently when the court turned down the SEC's request for a temporary restraining order. The news was bolstered by the same court giving a conditional ruling to have Binance.US resume operations in the US. However, in the most recent update, the plaintiff took the day after Judge Jackson determined that Binance's defamation allegations against the agency were unfounded.

It sprouts from a press release from the SEC, where the regulator called out Binance for commingling and diverting customer assets from trading platforms to investment vehicles controlled by CEO Changpeng Zhao. The court's decision to deny the charge marked a pronounced loss early in the week.

According to Binance, the SEC disregarded the Washington, DC professional conduct rule. This rule states:

A lawyer engaged in a case being tried to a judge or jury shall not make an extrajudicial statement that the lawyer knows or reasonably should know will be disseminated by means of mass public communication and will create a serious and imminent threat of material prejudice to the proceeding.

The loss comes despite the legal prowess on the defendants' desk, with Judge Jackson asking lawyers from both sides to observe ethical standards moving forward, saying the current citing did not warrant a rebuke.

Meanwhile, John Reed Stark has questioned the feasibility of Binance's move to go after the SEC. Specifically, he says:

[I] wonder how much Binance's motion cost in legal fees and whether it was worth filing at all. It seemed so frivolous on its face and more akin to marketing theater than legal argument. Moreover, my view is that the motion may also prompt the criminal authorities to expedite whatever action, if any, they plan on taking with respect to Binance.

Stark believes it was rather frivolous of Binance to file the motion in the first place, interpreting it more as a marketing move than a pursuit for justice. Nevertheless, the former SEC official thinks the move could provoke the criminal authorities to hasten whatever action they plan o taking against the exchange. 

Nevertheless, if Binance wins the case against the SEC, the largest exchange by trading volume could still sue the financial regulator for damages. In this regard, market players call on the agency to be more cautious moving forward because they would need taxpayer money to facilitate a defense if the worst happens.

Binance Coin suffers the brunt of a failed court day

Binance Coin (BNB) price has reacted to the lost court day with a 2% slump, whose impact is best indicated in the fall in 24-hour trading volume. The altcoin features among the crypto top-10 that are still bearish on the hourly, daily, and weekly timeframes.