As an experienced financial analyst, I view this decision by Judge Amy Berman Jackson as a significant victory not only for Binance but for the entire crypto industry. The dismissal of the SEC’s claims that Binance’s BNB coins and Binance USD stablecoin (BUSD) qualify as securities under the Howey Test is a crucial step forward in clarifying the regulatory landscape for digital assets.
As an analyst, I’m excited to report a significant victory for Binance and the cryptocurrency community following Judge Amy Berman Jackson’s dismissal of the SEC’s argument that secondary sales of Binance’s BNB coins qualify as securities under the Howey Test. This decision aligns with Judge Analissa Torres’ ruling in the Ripple case, emphasizing the importance of evaluating the economic reality of token transactions when applying the Howey Test.
Binance’s BNB Tokens Are Not Securities
Judge Jackson further explained that while the government’s argument regarding the investment contract embodiment of crypto assets is a valid point, it alone is not enough to label the secondary sale of BNB Coin as an investment contract. Alongside the discussion on the technology and platform independence, as well as each token’s performance, more substantial evidence is required for such classification.
In a similar ruling, Judge Jackson dismissed both the Securities and Exchange Commission’s (SEC) allegations regarding the sale of Binance USD stablecoin (BUSD) and the “Simple Earn” passive income feature on Binance.
It’s worth noting that Judge Jackson pointed out a contradiction between the parties’ positions. Specifically, the government has maintained throughout this lawsuit that the coins at issue are not securities, but rather investment contracts. However, the judge noted that the agreement the parties reached is inconsistent with this position.
Judge Jackson added that the character of a token may change with the passage of time, implying that if a token is classified as a security at its inception, it’s not guaranteed to retain that status indefinitely.
As a crypto investor, I believe this distinction challenges the SEC’s perspective and could pave the way for a landmark decision in the ongoing debate about digital asset classification.
SEC’s Case on BNB Staking to Continue
Binance scored a significant victory in court, but the SEC isn’t entirely defeated. According to the court documents, Judge Jackson allowed the SEC to persist with its allegations against Binance’s BNB staking program, accusations of anti-fraud violations, and claims related to the sale of BNB following the Initial Coin Offering (ICO).
As an analyst, I would rephrase it this way: The Securities and Exchange Commission (SEC) has the authority to maintain its allegation that Changpeng “CZ” Zhao, Binance’s founder, holds significant control over the company. Consequently, according to the Exchange Act, Binance should have registered with the SEC.
In 2023, Gary Gensler, then head of the Securities and Exchange Commission (SEC), accused Binance of selling BNB tokens as unregistered securities and violating US regulations by allegedly continuing to operate within the country without proper registration.
Changpeng Zhao, the founder of Binance, is now in the fourth month of his imprisonment due to money laundering rule violations. He has recently disclosed his future intentions to the Binance community after serving his sentence.
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2024-06-29 07:53