Binance vs SEC Update : SEC Strikes Hard at Binance, but One Charge Dismissed!
Is Binance Still the King of Crypto Exchanges ?
In a recent court decision, Judge Amy Berman Jackson dismissed the SEC's claim that Binance Coin (BNB) is traded illegally on secondary markets, referencing the Ripple case as a precedent.
Memorandum Opinion and Order from Judge Amy Berman Jackson
Source: CourtListener
Binance Face SEC Claims
Cryptocurrency exchange Binance faced a setback when a U.S. court declined to dismiss most of the claims brought against it by the Securities and Exchange Commission (SEC). The claims that will proceed include:
Staking Program: Claims related to Binance's staking program.
BNB Sales: Allegations concerning the sale of BNB following its initial coin offering.
Anti-Fraud Violations: Accusations of anti-fraud violations.
Control Person Allegations: The claim that former Binance CEO Changpeng ‘CZ’ Zhao acted as a “control person”.
Registration Requirement: The claim that Binance was obligated to register under the Exchange Act.
Dismissed Claims
Judge Jackson dismissed the SEC’s claims concerning BNB secondary market sales and all sales related to the Binance USD (BUSD) stablecoin. She referenced Judge Analisa Torres’ ruling in the SEC’s case against Ripple to support her decision.
Legal Repercussions
This partial dismissal came as a surprise to finance lawyer Scott Johnsson, who called it a “big loss” for the SEC. Eleanor Terrett, a reporter for FOX Business, noted that this decision might strengthen the legal positions of other cryptocurrency companies like Coinbase, Kraken, and Consensys in their respective litigations.
Other SEC Claims Dismissed
Additionally, the SEC’s claims related to Binance’s passive income feature “Simple Earn” were also dismissed by Judge Jackson. A court hearing has been scheduled for July 9 to address the remaining claims.
Background of the Case
The SEC, led by Gary Gensler, filed a lawsuit against Binance in June 2023, alleging that the exchange offered the sale of unregistered securities and operated illegally in the U.S. Binance and CZ contested the lawsuit, arguing that the SEC overstepped its legal authority.
Regulatory Challenges
Binance has faced regulatory hurdles, with seven U.S. states, including Alaska, Florida, Maine, and North Carolina, either revoking or refusing to renew its money transmitter license.
Currently, CZ is serving a four-month prison sentence for violating money laundering laws.
Binance’s Market Position
Despite these legal challenges, Binance remains the largest cryptocurrency exchange globally, with over 200 million users and $100 billion in assets under management.
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