In a significant turn of events for Binance, the US District Court for the District of Columbia has dismissed major charges filed by the SEC against the cryptocurrency giant. The lawsuit, initiated in June 2023 under the leadership of Gary Gensler, alleged that Binance traded unregistered securities and operated without proper authorization in the United States.
This echoes a previous legal battle involving Ripple. In July 2023, Judge Torres, presiding in a different jurisdiction, determined that transactions involving Ripple’s XRP tokens on secondary trading platforms did not constitute offers of investment contracts. This crucial interpretation undercut the SEC’s contention that cryptographic tokens inherently qualify as investment contracts, thereby shaping the outcome in favor of Binance.
Moreover, the court rejected the SEC’s argument that Binance’s fiat-backed BUSD stablecoin should be classified as an investment contract. The decision underscored the lack of evidence suggesting investors expected BUSD’s value to appreciate directly due to efforts by Binance. Nevertheless, the company still confronts legal hurdles, with the court allowing some charges related to direct BNB sales to proceed.
The Binance case, akin to Ripple’s, underscores the ongoing debate surrounding the SEC’s regulatory stance on cryptocurrency transactions rather than the tokens themselves. This ruling marks a pivotal moment for the cryptocurrency industry, establishing a precedent that could curb future extensive regulatory actions by the SEC.
Disclaimer: The opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or legal advice. Investing in cryptocurrencies carries inherent risks of financial loss.
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