SEC Brings Up Zakinov vs Ripple in Latest Binance Lawsuit Hearing

The ongoing legal skirmish between Binance and the U.S. Securities and Exchange Commission (SEC) has taken an intriguing turn as the SEC references the Zakinov vs Ripple case in its recent hearing.

The Zakinov vs Ripple case centers around the classification of XRP as a “security” under California or federal securities laws, adding a layer of complexity to the broader debate on the regulatory status of virtual tokens.

It is noteworthy that Ripple over the last year emerged victorious in multiple rounds of the SEC case including rulings that have declared XRP (XRP) to be non-security under the law and that have denied the SEC’s request for an interlocutory appeal.

Zakinov vs Ripple and XRP’s Security Status

The SEC’s inclusion of the Zakinov vs Ripple case in the hearing is notable, as it addresses the crucial question of whether XRP should be classified as a security.

The case argues that XRP falls under the definition of a security under either California or federal securities laws. This reference signals the SEC’s intent to draw parallels between the regulatory challenges faced by different cryptocurrencies and, in this instance, XRP.

Binance SEC Judge Request for Citations

Following a January 22 hearing, Judge Amy Jackson issued a minute order directing both the SEC and Binance to provide full citations for cases discussed during arguments not cited in their briefs.

This request suggests the court’s commitment to a thorough examination of relevant legal precedents and decisions. The focus on comprehensive citations emphasizes the importance of clarity and transparency in the legal proceedings.

In response to the judge’s directive, the SEC filed a notice of supplemental authority, pointing to four court cases that it deems crucial for a summary judgment in the Binance lawsuit.

These cases, including Owen v. Elastos Foundation, Patterson v. Jump Trading LLC, Houghton v. Leshner, and Zakinov v. Ripple Labs, Inc., provide legal context and precedent for the arguments presented by the SEC.

SEC’s Ambiguity on Token Security Boundaries

One of the key points of contention in the hearing is the SEC’s lack of a clear definition regarding what it considers a security concerning virtual tokens.

Judge Jackson raised concerns about how issuers are expected to navigate these regulatory waters without a well-defined boundary. This ambiguity adds a layer of complexity to the case, as the court grapples with the challenge of establishing clear regulatory standards for the evolving landscape of digital assets.

While the SEC has presented its arguments and referenced pertinent court cases, the defendants, including Binance, Binance.US, and Changpeng ‘CZ’ Zhao, are yet to provide details on relevant cases discussed during the hearing.

The forthcoming response from the defendants will play a crucial role in shaping the narrative and legal trajectory of the case.