The U.S. Securities and Exchange Commission (SEC) on Monday defended its regulatory authority over certain cryptocurrency assets in a legal confrontation with crypto exchange Binance (CRYPTO: BNB), as the latter urged a federal judge to dismiss the agency's lawsuit against it.

What Happened: The hearing centered around Binance's request for dismissal marks a pivotal moment in the ongoing debate over the SEC's jurisdiction in the crypto sector, Reuters reported.

Binance has formally requested U.S. Judge Amy Berman Jackson to reject a lawsuit filed by the SEC, which accuses the exchange of rule violations and fraud, Reuters reported. 

This lawsuit represents one of Binance's significant legal hurdles in the United States.

Judge Jackson, however, did not issue an immediate decision, opting to take the matter under advisement.

Notably, Binance agreed to a $4.3 billion settlement with the Department of Justice and the Commodity Futures Trading Commission in November over allegations of illicit finance violations.

Changpeng Zhao, Binance's then-CEO, admitted guilt to charges of violating U.S. anti-money-laundering laws and subsequently stepped down as CEO.

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Why It Matters: Despite this settlement, the SEC's lawsuit continues to loom over the exchange.

The SEC's allegations against Binance, Zhao and its U.S. branch include accusations of artificially inflating trading volumes, misusing customer funds, failing to prevent U.S. customers from accessing its platform and deceiving investors about its market surveillance measures.

Furthermore, the SEC contends that Binance unlawfully enabled the trading of several crypto tokens it considers unregistered securities.

A crucial aspect of the SEC's case rests on determining whether the crypto assets traded on Binance's platform qualify as securities under the SEC's regulatory purview, a decision that could have far-reaching implications for the crypto exchange and the broader cryptocurrency market.

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