In a significant legal development, a U.S. court has allowed most of the claims made by the Securities and Exchange Commission (SEC) against Binance to proceed. This decision came despite Binance’s efforts to dismiss the majority of the allegations. However, the court did dismiss some specific claims related to secondary market sales of Binance Coin (BNB) and sales of the Binance USD (BUSD) stablecoin.
Key Court Decisions
On June 28, Judge Amy Berman Jackson ruled that claims related to Binance’s staking program, the sale of BNB following its initial coin offering, and anti-fraud violations would move forward. The SEC’s assertion that former Binance CEO Changpeng ‘CZ’ Zhao acted as a “control person” and that Binance was obligated to register under the Exchange Act were also upheld.
Dismissed Claims
However, Judge Jackson dismissed the SEC’s claims concerning BNB’s secondary market sales and all transactions involving BUSD. She referenced Judge Analisa Torres’ ruling in the SEC’s case against Ripple as a precedent for her decision to dismiss these specific claims. This dismissal was seen as a setback for the SEC, with finance lawyer Scott Johnsson describing it as a “big loss” for the regulator.
The SEC filed a lawsuit against Binance and CZ in June 2023, accusing them of offering the sale of unregistered securities and operating illegally within the United States. In response, Binance and CZ sought to have the lawsuit dismissed, arguing that the SEC had overstepped its legal authority.
Also Read: Binance Enforces Stricter Measures Against Account Misuse
Impact on Binance
Despite the ongoing legal battles, Binance remains the largest cryptocurrency exchange globally, boasting over 200 million users and managing $100 billion in assets. The exchange continues to face regulatory challenges, with seven U.S. states, including Alaska, Florida, Maine, and North Carolina, either revoking or refusing to renew its money transmitter license. Additionally, CZ is currently serving a four-month prison sentence for violating money laundering laws.
A court hearing is scheduled for July 9, where further proceedings regarding the SEC’s claims will take place. This ongoing legal scrutiny highlights the complex regulatory landscape that major cryptocurrency exchanges like Binance navigate.
