Key takeaways:
- In a federal court filing, the US SEC requests that a judge provide a summary judgment ruling in its lawsuit against the crypto exchange Binance.
- Judge Amy Jackson could consider rejecting a motion to dismiss from Binance based on “further grounds” offered by the Terraform Labs ruling.
In a federal court filing, the US Securities and Exchange Commission (SEC) requests that a judge provide a summary judgment ruling in its lawsuit against the cryptocurrency exchange Binance.
The SEC noted in a filing dated January 3 in the US District Court for the District of Columbia that specific issues raised by the commission’s December 28 finding in the case against Terraform Labs and its co-founder Do Kwon were also present in its enforcement action against Binance, Binance US, and former CEO Changpeng Zhao.
Judge Jed Rakoff decided that specific tokens involved in the purported scam were securities in the Terra case, generally siding with the SEC on the grounds that they are investment contracts and that “offers and sales of UST constituted” an investment contract. The filing from January 3 said:
“The court’s analysis of the Terraform defendants’ so-called ‘stablecoin’ UST is particularly relevant to this Court’s consideration of Defendants’ arguments concerning Binance’s so-called ‘stablecoin’ BUSD, and Defendants’ staking-as-a service, BNB Vault, and Simple Earn programs,”
The SEC contended that Judge Amy Jackson could consider rejecting a motion to dismiss from Binance based on “further grounds” offered by the Terraform Labs ruling. The SEC had overreached its jurisdiction and applied its rules to securities “retroactively,” according to a move for dismissal that the cryptocurrency exchange and Zhao filed in September.
This is the commission’s case, one of the final ones from US financial regulators after Binance and the Departments of Justice, Treasury, and Commodities Futures Trading settled for $4.3 billion in December. Zhao’s guilty plea to one felony count was a condition of the settlement; he will be sentenced in February.
The SEC filed enforcement charges against Terraform Labs and Binance in 2023, claiming that the platforms sold unregistered securities. Along with other parties, the commission sued Coinbase, Ripple, Kraken, and other companies.
