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In a big win for Binance and the crypto community, Judge Amy Berman Jackson has dismissed the SEC’s claim that the secondary sales of Binance’s BNB coins qualify as securities under the Howey Test. Judge Jackson cited a similar decision from Judge Analissa Torres in the Ripple case stating that it is essential to weigh the economic reality of the token transaction while applying the Howey Test.
<h3 id="binance-s-bnb-tokens-are-not-securities">Binance’s BNB Tokens Are Not Securities</h3>
Adding further to her decision, Judge Jackson added that the government’s reliance on the assertion that “the crypto assets are the embodiment of the investment contract,” in addition to the arguments about the technology’s nature, the independence of the platform, and the performance of every token, is insufficient to classify that secondary sale of the <a href="https://coingape.com/price/binance-coin/" target="_blank" rel="noopener noreferrer nofollow">BNB Coin</a> constitute as investment contracts.
Similarly, the Judge Jackson also dismissed SEC’s claims over the sale of Binance USD stablecoin (BUSD). She also&nbsp;dismissed the SEC’s claims related to Binance’s passive income feature, “Simple Earn.”
Interestingly, Judge Jackson also noted that the agreement is also inconsistent with the government’s primary theory since filing the action which states “We aren’t saying that the coins are securities – we are talking about investment contracts.”
Judge Jackson further stated that a token’s nature can evolve over time, suggesting that if the token qualifies as a security initially, it is not necssary that it will always remain a security.
This distinction undermines the SEC’s position while leading a significant ruling in the ongoing debate over the classification of the digital assets.
Also Read: <a href="https://coingape.com/binance-cracks-down-on-account-misuse-threatens-suspension-for-violators/" target="_blank" rel="noopener noreferrer nofollow">Binance Revamps Fee Structure, Tightens VIP Broker Perks</a>
<h3 id="sec-s-case-on-bnb-staking-to-continue">SEC’s Case on BNB Staking to Continue</h3>
Although it’s been a big win Binance, it’s not a clean sweep as Judge Jackson stated that the U.S. Securities and Exchange Commission (SEC) can continue to pursue claims associated with Binance’s BNB staking program, the anti-fraud violations, as well as sale of BNB after the ICO, notes the <a rel="noopener noreferrer nofollow" href="https://storage.courtlistener.com/recap/gov.uscourts.dcd.256060/gov.uscourts.dcd.256060.248.0_1.pdf" target="_blank">court filing</a>.
Furthermore, the SEC will also be able to continue on its claims that Binance founder Changpeng ‘CZ’ Zhao acted as the “control person” of the company. Thus, the SEC can asset that it was mandatory for Binance to register under the Exchange Act.
The <a href="https://coingape.com/tag/binance-vs-sec/" target="_blank" rel="noopener noreferrer nofollow">Binance vs SEC</a> lawsuit dates back to 2023 when Gary Gensler claimed that the exchange conducted the sale of BNB as unregistered securities and was illegally operating in the US.
Binance founder CZ is currently serving the fourt month of his sentence for violating money laundering rules. <a href="https://coingape.com/binance-founder-cz-bids-thanks-to-supporters-shares-post-prison-plans/" target="_blank" rel="noopener noreferrer nofollow">Changpeng Zhao</a> has also shared his post prison plans with the Binance community.
Also Read: <a href="https://coingape.com/binance-cracks-down-on-account-misuse-threatens-suspension-for-violators/" target="_blank" rel="noopener noreferrer nofollow">Binance Cracks Down On Account Misuse</a>
The post <a href="https://coingape.com/breaking-binance-bnb-sales-dont-qualify-as-securities-judge-dismisses-sec-claims/" rel="noopener noreferrer nofollow">Breaking: Binance’s BNB Sales Don’t Qualify As Securities, Judge Dismisses SEC’s Claims</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.

Breaking: Binance’s BNB Sales Don’t Qualify As Securities, Judge Dismisses SEC’s Claims

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