US Judge Allows Major Portion of SEC Lawsuit Against Binance and CZ to Proceed
In the United States, a court didn’t sustain the move by crypto platform Binance to dismiss many of the claims proposed against it by the Securities and Exchange Commission (SEC), the court confirmed.
According to the court filing by Judge Amy Berman Jackson on June 28, claims related to Binance’s staking program, the sale of BNB tokens following its initial coin offering, and anti-fraud violations will proceed. The court also upheld the SEC’s contention that former Binance CEO Changpeng “CZ” Zhao acted as a “control person” and that Binance was obligated to register under the Exchange Act.
Court Ruling Wasn’t a Complete Victory for SEC
Nonetheless, the SEC failed to win the entire case. Judge Jackson resolved BNB secondary market sales-related claims and BUSD stablecoin deals in favor of the defendants. In her decision, she referred to Judge Analisa Torres’ ruling in the SEC’s case against Ripple as supporting grounds for dismissing the SEC’s claim regarding BNB secondary market sales.
The court’s decision astounded finance lawyer Scott Johnsson who depicted it as a big blow to the securities regulator. To this effect, Fox Business reporter Eleanor Terrett predicts that Coinbase, Kraken, and Consensys will benefit from the opinion in their respective litigations.
Judge Jackson also threw out the SEC’s contentions that Binance’s passive income feature, “Simple Earn,” is permissible. A hearing is set for July 9 to consider the issue more deeply.
Binance Sued by the SEC
Gensler, the head of the SEC, took legal action against Binance for allegedly offering the unregistered securities and operating against the laws in that country in June of 2023. Binance and CZ struck back by asking the court to throw the case out about three months later, insisting that the SEC had crossed the legal line.
The Case of Binance on the Regulatory Terrain
Aside from the lawsuit, Binance was hit by some regulatory roadblocks. Seven US states such as Alaska, Florida, Maine, and North Carolina have either pulled Binance’s license to renew its money transmitter license or denied them the possibility of doing the same. Thus, the duration of which the CZ was imprisoned is four months for the breaking of the money laundering laws.
Binance’s Leading Perseverence
That said, Binance is still on top among the world’s cryptocurrency exchanges. Binance is the largest crypto exchange in the world when they mention 200 million customers and $100 billion in assets. They wrote 130 million account base in 2022. Well, were you that lucky when you came up with the plain statement? It seemed even more impressive in fact! 40 million users more came to join the community by 2023, and the resulting count was 170 million. Too, Binance has managed to attract at least 30 million clients just in half 1 of 2024.
In May, Financial Intelligence Unit of India (FIU-IND）announced that Binance has fulfilled the registration requirements and, thus, the exchange has returned to India inspite of facing many regulatory barriers. Before that, the company stated that it had been issued a license from VARA, a Dubai regulator, allowing it to serve retail clients, as well as qualified and institutional ones.
