In a significant development for Binance, the US District Court for the District of Columbia has dismissed major charges filed by the SEC against the cryptocurrency powerhouse. The lawsuit, initiated in June 2023 during Gary Gensler’s tenure, alleged that Binance traded unregistered securities and operated without proper authorization in the US.
This case draws parallels with a previous matter involving Ripple. In July 2023, Judge Torres, presiding in a separate jurisdiction, determined that transactions involving Ripple’s XRP tokens on secondary trading platforms did not amount to offers of investment contracts. This crucial distinction was pivotal in refuting the SEC’s argument that cryptographic tokens should be classified as investment contracts, thereby influencing the favorable outcome for Binance.
Additionally, the court dismissed the SEC’s assertion that Binance’s fiat-backed BUSD stablecoin qualified as an investment contract. The ruling underscored the lack of evidence demonstrating that investors anticipated BUSD’s appreciation solely due to Binance’s efforts. Nonetheless, Binance still faces legal hurdles, as the court allowed certain charges related to direct BNB sales to proceed.
The Binance case, akin to Ripple’s, underscores the ongoing debate over the SEC’s regulatory approach toward cryptocurrency transactions rather than the tokens themselves. This landmark decision marks a milestone for the cryptocurrency industry, potentially setting a precedent that could curtail future extensive regulatory actions by the SEC.
Disclaimer: The opinions expressed in this article are solely for informational purposes and do not constitute financial, investment, or legal advice. Investing in cryptocurrencies carries inherent risks of financial loss.
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