Binance vs SEC: Legal Storm Intensifies, Key Developments Unfold
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Binance is in bigger trouble again! A U.S. court has allowed most of the claims by the US SEC regulators against cryptocurrency exchange Binance. Judge Amy Berman Jackson ruled that claims regarding Binance’s staking program, the sale of its BNB token after its initial coin offering, and anti-fraud violations will move forward. The SEC’s assertion that former Binance CEO Changpeng ‘CZ’ Zhao acted as a “control person” and that Binance was required to register under the Exchange Act will also be heard in court.
Dismissal of Secondary Market Sales Claims
However, the judge dismissed the SEC’s claims related to the secondary market sales of BNB and all sales concerning the Binance USD (BUSD) stablecoin. A previous ruling influenced this decision in the SEC’s case against Ripple.
What to Expect From the Upcoming Hearing
The dismissal of certain claims was unexpected, with finance lawyer Scott Johnsson describing it as a significant setback for the SEC. FOX Business reporter Eleanor Terrett noted that this ruling might benefit other crypto firms like Coinbase, Kraken, and ConsenSys in their legal battles. The hearing on the case is scheduled for July 9.
The SEC had filed its lawsuit against Binance in June 2023, alleging the sale of unregistered securities and illegal operations in the U.S. Binance and CZ sought to dismiss the lawsuit, claiming the SEC had overreached its authority.
Binance’s Resilience Amid Legal Troubles
Despite these legal challenges, Binance remains the largest cryptocurrency exchange globally, with over 200 million users and $100 billion in assets under management. However, seven U.S. states, including Alaska, Florida, Maine, and North Carolina, have either revoked or refused to renew Binance’s money transmitter license. Meanwhile, CZ is currently serving a four-month prison sentence for violating money laundering laws.
Gensler’s Stance
Under Chair Gary Gensler, the SEC argues that most digital tokens are unregistered securities that should be subject to its oversight. Gensler is highly critical of crypto exchanges and the digital-asset industry for alleged noncompliance. However, a series of SEC lawsuits to enforce its position has failed to settle whether digital tokens are securities. In the meantime, Clarifying legislation from Congress remains pending, and the industry accuses the regulator of overreach.
