The ongoing legal battle involving the US Securities and Exchange Commission (SEC), cryptocurrency exchange Binance, and its CEO Changpeng “CZ” Zhao has taken an unexpected turn. A third-party entity named “Eeon” has submitted a motion to intervene in the lawsuit, introducing a new participant with a vested interest in the proceedings. This intervention by Eeon adds a layer of complexity to the case, highlighting its significance and the various perspectives involved.
The SEC previously filed a lawsuit against Binance Global, Binance.US, and CEO CZ, citing charges including investor deception and violations of securities laws. Eeon has now filed a motion to intervene on behalf of Binance customers, arguing that their interests have not been adequately represented.
As identified by the court’s order issued on June 17, 2023, Eeon claims to be the proper party to this matter, representing stakeholders, investors, and owners of cryptocurrency held by Binance and its subsidiaries. They contend that their interests were not taken into consideration.
Based in Nevada, Eeon argues that cryptocurrencies should be categorized as commodities rather than securities. They assert that these digital assets are primarily used for personal and household purposes, falling outside the scope of commercial regulations. Furthermore, Eeon claims that the SEC lacks jurisdiction over cryptocurrencies and highlights the absence of tailored regulations for this emerging asset class. They criticize Binance for blocking customer access to their crypto assets without notice and for maintaining control over the keys, exacerbating the situation.
Eeon also criticizes the SEC for prioritizing punitive measures over investor protection and dismisses the allegations of customer involvement in money laundering as unsubstantiated. They have requested the court to grant customers access to their frozen assets on Binance’s platforms.
As part of their counterclaim, Eeon seeks damages from both Binance and the SEC. They propose a daily payment equivalent to 20% of the withheld funds compounded per day, amounting to $1000 per customer per day. Additionally, they demand equal responsibility for penalties, with the SEC paying $500 and Binance and its subsidiaries paying $500 for their alleged actions.
Customers affected by the lawsuit express frustration with the SEC’s sudden actions without concrete evidence or well-defined crypto regulations. They argue that these legal proceedings have disrupted their daily activities and investments in Binance and cryptocurrencies. Eeon suggests that the court could have considered freezing a portion, potentially 50%, of crypto assets to allow customers access to at least a fraction of their holdings.
With their claimed 30 years of court case experience, Eeon references a previous court filing against the US Federal Reserve System in 2018 to support their arguments.
The entry of Eeon as a third-party participant injects a new dynamic into the ongoing legal battle between Binance, the SEC, and now the US Federal Reserve. This development underscores the complexities surrounding cryptocurrency regulation and the potential impact on investors and the broader industry.
