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The cryptocurrency community is abuzz with the latest developments in the legal showdown between Binance and the U.S. Securities and Exchange Commission (SEC). The recent ruling in the case draws heavily from the Ripple-SEC lawsuit, stirring reactions.
Legal expert who goes by the name "Metalawman" on X reacted to the ruling, noting that Judge Amy Berman Jackson's decision leaned significantly on the rationale used by Judge Analisa Torres in the Ripple case.
The judge cited Judge Analisa Torres' 2023 ruling in the Ripple lawsuit in granting Binance's motion to dismiss the secondary BNB sales claim.
Critical of the SEC's approach, Judge Jackson stated that the agency failed to provide a "clear differentiating principle" to distinguish between tokens that are considered securities and those that are not.
Specifics of ruling
The SEC sued Binance and its former CEO Changpeng "CZ" Zhao a year ago for mishandling customer funds, misleading investors and regulators and breaking securities rules. The defendants contested the claims and asked for the case to be dismissed.
Out of 13 counts, 10 will proceed in their entirety, two partially, and one has been dismissed. The dismissed count concerns the sales of the BUSD stablecoin; part of a count related to the sales of BNB, a token linked to the Binance ecosystem, was also tossed. The dismissed portion pertains to secondary sales of BNB by parties other than Binance.
Tomiwabold OlajideAn allegation of illegality involving an offering called Simple Earn, which allows investors to lend tokens and earn interest, was dismissed as well, although the remainder of the related count will proceed.
Community reaction
Despite the judge permitting some claims to proceed, the crypto community still views the ruling as positive, especially as regards secondary market sales.
According to Metalawman, the dismissal of the SEC's claims involving secondary market sales by third parties is a win for the greater crypto industry. The ruling's reliance on the Ripple case also sets a significant precedent.
Metalawman also believes the decision supports Coinbase's claim that an early appeal of Judge Failla's decision is needed, given district courts disagree on the fundamental question of whether digital asset tokens sold on secondary markets constitute securities.
Arman Shirinyan
Alex Dovbnya
Vladislav Sopov
Dan Burgin