The SEC has confirmed its legal position in the continuing action against Binance, Binance. US, and former CEO Changpeng Zhao, alleging that they operated an unregistered securities exchange. The SEC alleges that Binance’s BNB token enabled the sale of ten cryptocurrencies, which it believes qualify as securities, on secondary markets.
This move comes after Binance and Zhao filed a motion to dismiss, which the SEC is currently contesting. The agency’s most recent court brief reiterates its reliance on the Howey test, an established legal criterion for determining whether an asset qualifies as a security. The SEC’s memorandum delves deeper into the classification of cryptocurrencies and the BNB token, traded on Binance.
The updated claim comes after U.S. District Court Judge Amy Berman Jackson expressed concerns about the previous case. In response, the SEC made changes to better conform with the court’s findings while continuing to allege that Binance and its officials violated federal securities laws.
The SEC’s filing also addressed larger complaints of its regulatory stance, defending its activities against allegations that it is overreaching in the bitcoin area. Despite industry protests, the SEC believes that such oversight is necessary and justified.
The SEC first launched this legal complaint in June 2023 as part of its larger efforts to regulate the cryptocurrency business. The SEC has escalated the debate over the classification of digital assets in the US legal system by declaring 68 cryptocurrencies as securities through additional cases targeting large exchanges like Coinbase.
The ruling in this case may have far-reaching consequences for the Bitcoin sector. A favorable verdict for the SEC could strengthen the agency’s authority over digital assets, potentially influencing future regulation and trading of cryptocurrencies. As the court struggle continues, the cryptocurrency world is on edge, waiting for a verdict that might set a significant precedent.
