The U.S. District Court of Columbia Federal Judge dismissed the Securities and Exchange Commission (SEC) allegations against Binance. It marks a big win for the largest crypto exchange in the ongoing regulatory battle with the SEC.
In a recent court filing on 28 June, Federal Judge Amy Berman Jackson rejected several core arguments by the SEC. These include the assertion of tokens as securities, the sale of BNB to other crypto firms, and the classification of BUSD as an investment contract.
SEC’s inappropriate allegations against Binance
The SEC’s proclamation of crypto tokens as securities was the foundation of its regulatory enforcement action against the platform. However, the court dismissed the stance. The judge said the authority should oversee transactions of tokens and not the tokens themselves, which are not securities.
Likewise, the second central stance the U.S. court nullified was the SEC deeming the BNB token sale on secondary exchanges a security contract. The court admitted that the token sale had already passed the Howey Test. The test refers to a a criterion to ensure the transaction was not a security. Moreover, BNB purchasers acquired tokens in the secondary market only for profit, not illegal purposes.
The judge demolished the SEC’s third central claim, calling BUSD sales an investment. The court argued that BUSD is a fiat-based stablecoin and doesn’t experience volatility like other crypto coins. Hence, it would be much more difficult for a stablecoin to pass the security criteria test. The court criticized the regulatory authority for taking inconsistent approaches and making allegations about various stablecoins that create FUD in the market.
Since the lawsuit continues, the court requires the SEC to submit solid arguments to prove its claims in the next hearing, set for 9 July. The court affirmed that other claims regarding Binance’s staking program, BNB’s Initial coin offering, and Changpeng Zaho as the exchange’s ‘control person’ will also proceed.
The court’s decision highlights Binance’s legal win and the SEC’s regulatory grip on the crypto industry. However, Binance remains steadfast and consistent in defending the entire crypto landscape from regulatory constraints around the globe. Movements encouraging the growth of innovation and technology will pave the way for a brighter future of digital assets.
