In a significant ruling for Binance, the US District Court for the District of Columbia dismissed huge claims made by the SEC against Binance. Headed by the chairperson Gary Gensler, the SEC filed a legal lawsuit against Binance in June 2023, alleging the exchange sold unregistered securities and operated illegally in the U.S.
Judge’s Ruling Echoes Ripple’s Long-Awaited Victory
The decision of Columbia court was highly influenced by Judge Torres’ ruling in the SEC vs. Ripple case. In July 2023, Judge Torres determined that the XRP token sale by Ripple on the secondary trading platforms were not offers of investment contracts. This reasoning was the key in dismissing the SEC’s claim that crypto tokens are investment contracts. Both the cases emphasized on the nature of transactions over the tokens themselves.
BUSD Stablecoin and Remaining Challenges
The court also rejected the SEC’s argument that Binance’s fiat backed stablecoin, BUSD, is an investment contract. It denied having found any evidence suggesting that the buyers expected value appreciation due to Binance’s efforts.
Despite the win, Binanc is still not completely out of the woods. The court allowed some of the SEC’s claims to proceed. SEC has to prove that the direct sales of BNB could be considered as securities transactions.
Broader Implications for the Crypto Industry
Both the cases, SEC vs. Binanc and SEC vs. XRP, share significant similarities as both challenge the SEC’s broad regulatory approach, focusing on type of transactions.
The decision is a critical victory for the crypto industry, setting precedent that could reduce SEC’s overreach.
Adding another page to the ever changing crypto landscape, Donald Trump’s campaign is accepting various major cryptocurrencies such as Bitcoin and Ether as donations. Not only this, they are also accepting some other popular low value tokens known as meme coins such as Shiba Inu & Doge. This could add strength to crypto in the US and foster a more supporting regulatory environment.
