Key takeaways:
- Following an argument over whether or not particular tokens qualified as securities, attorneys for Binance requested that the court dismiss the case.
- The weather caused a delay in the hearing, which was initially scheduled for January 19.
Following an argument over whether or not particular tokens qualified as securities, attorneys for cryptocurrency exchange Binance, which was sued by the US Securities and Exchange Commission (SEC), requested that the court dismiss the case.
A hearing on January 22 in the US District Court for the District of Columbia saw comments from Binance’s legal team about the way the SEC handled cryptocurrencies in light of the existing legislative and regulatory frameworks. The weather caused a delay in the hearing, which was initially scheduled for January 19.
In response to the SEC’s directive for cryptocurrency companies to come in and register, a Binance attorney claimed in a Reuters report that the agency was treating the sector inconsistently by keeping the door closed and impeding any practical way for businesses to comply.
According to reports coming out of the courtroom, the SEC declared that the Howey test for securities was “clear” for all assets, including cryptocurrency, and that authorities were under no duty to alert companies to the possibility that they were breaking securities laws.
Judge Amy Berman Jackson allegedly stated that she would consider the arguments presented by Binance and the SEC. Judge Jackson allegedly told the legal team representing the SEC:
“It seems like you are trying to say that all digital assets, at the end of the day, have the earmark of securities,”
For cryptocurrency companies doing business in the US, the SEC vs Binance case may have a big impact. Enforcement efforts against significant businesses, such as Binance, Coinbase, Ripple, and Kraken, have resulted from numerous companies’ claims that authorities do not provide a clear regulatory framework for lawful operations.
In November 2023, Binance, Binance US, and former CEO Changpeng Zhao announced a $4.3 billion settlement with the US Justice Department, Treasury Department, and Commodity Futures Trading Commission. As part of the settlement, Zhao entered a guilty plea to one felony charge. On February 23, he will be sentenced.
