Binance Celebrates Partial Victory Against SEC
Binance, a leading cryptocurrency exchange, is celebrating a significant legal milestone in its ongoing battle with the U.S. Securities and Exchange Commission (SEC). Recently, a federal court dismissed several key SEC claims against Binance, marking a notable triumph for the exchange and the broader cryptocurrency industry.
HIGHLIGHTS
- Binance celebrates its latest win against the U.S. SEC.
- A federal judge has dismissed key claims of the U.S. SEC against Binance.
- Binance.US remains prepared as the legal battle advances.
Partial Victory Against SEC
Binance has achieved a partial victory in its ongoing legal battle with the U.S. SEC, as a federal court recently dismissed several of the agency’s major claims. This ruling is seen as a significant win for the crypto exchange and the entire cryptocurrency sector.
In a blog post shared on the X platform, Binance announced, “In a victory for the industry, a U.S. federal court dismissed several SEC claims against Binance.” The post highlighted that the court ruled crypto tokens are not securities, sales of BNB on secondary exchanges were not sufficiently alleged to be securities, and Binance’s stablecoin, BUSD, is not classified as a security.
A Closer Look Into The Report
Meanwhile, the court’s decision, as detailed in Binance’s blog, rebuffed the SEC’s assertion that digital tokens are inherently securities. Notably, Judge Amy Berman Jackson dismissed this broad claim, emphasizing the need to consider the specific circumstances surrounding each transaction rather than labeling the tokens themselves as securities.
This aspect of the ruling challenges the SEC’s strategy of enforcing regulations through broad classifications, aligning instead with the principle that regulatory oversight should be based on transaction context. Moreover, the court rejected the SEC’s argument that secondary market sales of BNB tokens should be treated as securities transactions.
This decision limits the SEC’s ability to extend its enforcement reach to secondary trading activities on crypto exchanges, thereby providing a crucial check on the agency’s regulatory power. Besides, the court found that the SEC failed to demonstrate that purchasers in secondary market sales bought BNB tokens with an expectation of profit, which is a critical component of the Howey Test used to determine whether an asset qualifies as a security.
In addition, the court dismissed the SEC’s claim that Binance’s fiat-backed stablecoin, BUSD, is sold as an investment contract. The court noted that BUSD was promoted as a stablecoin without any indication that investors anticipated its value would rise due to Binance’s efforts. This decision further reinforces the position that stablecoins do not inherently meet the criteria for securities classification.
Binance Stands Firm Amid As Legal Battle Continues
Despite the favorable rulings, some of the SEC’s claims against Binance were allowed to proceed. The court did not dismiss the SEC’s allegations that direct sales of BNB tokens may constitute securities transactions, as these claims require further examination during the judicial process.
However, Binance.US expressed readiness for the ongoing legal battle, stating in a recent X post, “We were prepared for this and look forward to having this case move forward in the judicial process.” The crypto exchange highlighted its adherence to U.S. regulations and commitment to maintaining 1:1 reserves for all customer assets.
In addition, Binance.US criticized the SEC’s regulation-by-enforcement approach, which has been perceived as politically motivated overreach under the current leadership. The exchange remains confident in its position, asserting that the SEC’s case lacks factual and legal support.
Meanwhile, Binance emphasized its intention to continue serving its customers and advancing its business, underscoring its strong footing and dedication to providing access to digital assets. As the case progresses, Binance’s partial victory is a significant step in the ongoing struggle between regulatory authorities and the evolving cryptocurrency market.
Besides, in a recent development, Coinbase has filed a notice requesting an interlocutory appeal, citing Judge Jackson’s decision in the Binance BNB case. This has also attracted market attention, with investors closely monitoring the shifting crypto regulation.
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