Judge Jackson’s June 28 ruling allows SEC claims against Binance for BNB staking, anti-fraud violations, and ICO coin sales to proceed to trial.
US Judge Declines Dismissal of SEC Claims Against Binance
A United States judge has declined to dismiss several claims brought against crypto exchange Binance by the Securities and Exchange Commission (SEC).
The case was filed in June 2023 by the SEC chairman Gary Gensler who accused Binance of offering securities without registering them and operating in the United States without authorization.
In a June 28 court filing, Judge Jackson’s decision allowed some claims to proceed to trial while dismissing others. Jackson permitted the SEC to continue with claims related to Binance’s BNB staking program, anti-fraud violations, and the sale of BNB coins following its ICO.
The SEC also proved its allegations that Changpeng ‘CZ’ Zhao, the founder of Binance, was a control person and the allegations that Binance should have registered under the Exchange Act.
However, Judge Jackson dismissed the allegations related to the secondary market sale of Binance’s BNB tokens, relying on the similar decision of the SEC in the Ripple case. She also dismissed suggestions concerning the Binance USD (BUSD) stablecoin and the exchange’s Simple Earn passive income tool.
The decision is a major step in the legal battle over the status of virtual property. This is in line with the previous judicial decisions that have emphasized on the need to appreciate the economic aspect of token sales under the Howey Test.
Nevertheless, Binance has faced legal problems and is still the biggest exchange for cryptocurrencies with more than 200 million users and assets of over $100 billion. The case remains in the limelight as it moves through the legal process with a court session set for July 9th.
This ruling by Jackson is somewhat favorable for Binance and the SEC at the same time, which has implications for the regulation of cryptocurrencies in the United States.