Federal Judge Gives Split Win In SEC Vs Binance Lawsuit

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After dismissing part of the United States Securities and Exchange Commission’s (SEC) lawsuit against crypto exchange Binance and its founder Changpeng Zhao, a federal judge has allowed other charges against the leading cryptocurrency exchange to proceed. Judge Amy Berman Jackson, who is presiding over the case, has scheduled a hearing for July 9, 2024.

Judge Cites Ripple vs. SEC Ruling

One of the dismissed charges is the SEC’s claim that BNB is traded illegally on secondary markets. The judge cited her colleague’s ruling in the Ripple vs. SEC case as precedent to dismiss the SEC’s BNB secondary market sales claim. Noteworthy, Judge Analisa Torres pronounced on July 13, 2024, that XRP does not qualify as securities. 

Other dismissed charges are all sales related to the Binance USD (BUSD) stablecoin and the SEC’s claims related to Binance’s passive income feature “Simple Earn.”

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Binance Seek Dismissal of SEC Claims

Since the beginning of this year, Binance has been focused on the dismissal of the U.S. SEC fraud lawsuit against it. However, it was unable to persuade Judge Jackson to dismiss the majority of accusations. The judge decided that claims against Binance’s staking scheme, the sale of BNB after its initial coin offering, and anti-fraud will proceed.

Also, Judge Jackson decided that charges against Zhao, as a “control person,” and Binance’s duty to register under the Exchange Act will equally proceed, according to the court filing from June 28. Noteworthy, Zhao stepped down from his position as CEO of the exchange last year and is currently serving a 4-month jail term.

Judge Jackson’s Decision Sets Precedent For Coinbase, Kraken And Consensys 

The position of the court on the charges took finance lawyer Scott Johnsson by surprise, as he described it as a “big loss” for the securities regulator. In the long run, this verdict on the lawsuit is likely going to set a precedent for crypto exchanges like Coinbase, Kraken, and Consensys. 

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These entities could “use this opinion to bolster their positions in their own litigations,” Fox Business reporter Eleanor Terrett opined. In its case with ConsenSys, the Commission recently dropped its probe into whether Ethereum (ETH) is a security. However, ConsenSys is still requesting a precise regulatory framework for the crypto industry.

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