SEC Seeks Summary Judgment in Lawsuit against Binance: An Extension of Regulatory Crackdown on Cryptocurrency Platforms
Summary:
The U.S. Securities and Exchange Commission (SEC) is urging a federal judge to deliver a summary judgment in its ongoing case against Binance, as it sees similarities in their lawsuit against Terraform Labs and its co-founder Do Kwon which recently ruled in the SEC's favor. Binance had previously sought dismissal, claiming SEC overreach. Meanwhile, the SEC's crackdown continues against other crypto platforms including Coinbase, Ripple, and Kraken, as these companies are accused of allegedly offering unregistered securities.
In a recent motion before a federal court, the U.S. Securities and Exchange Commission (SEC) has requested a judge deliberate on a summary judgment in their ongoing legal proceedings against crypto marketplace Binance. On January 3, the SEC indicated in a submission to the U.S District Court for the District of Columbia, that a notable number of concerns arising from the December 28 decision in their case against Terraform Labs and co-founder Do Kwon bore significant resemblance to their action against Binance, Binance.US, and ex-CEO Changpeng Zhao. Favorably disposed towards the SEC, Judge Jed Rakoff's ruling in the Terra case determined the particular tokens associated with the purported fraud to be securities due to being investment contracts furthuring that, any solicitations or sales of UST were investment agreements.
The filed January 3 document mentioned the Court's assessment of Terraform's supposed 'stablecoin' UST as being especially pertinent to its appraisal of the Defendants' arguments pertaining to Binance's alleged 'stablecoin' BUSD, including defending theories about Binance's staking-as-a-service, BNB Vault, and Simple Earn schemes.
According to the SEC, the judgment against Terraform Labs offers additional justification for Judge Amy Jackson rejecting a motion to dismiss from Binance. Back in September, the crypto giant and Zhao sought dismissal, claiming the SEC had exceeded its power and retroactively applied its securities standards.
After compensating $4.3 billion to the U.S. finance regulators inclusive of the Justice and Treasury Departments and the Commodity Futures Trading Commission in a settlement deal in December, the case by the SEC is one of the remainders against Binance. As a condition for settlement, Zhao consented to plead guilty to a single felony charge and awaits sentencing in February.
The enforcement proceedings against Terraform Labs and Binance represent some measures implemented by the SEC in 2023 asserting the platforms issued unlicensed securities. Other lawsuits by the commission are pursued against the likes of Coinbase, Kraken, Ripple among others, indicating an intensifying crackdown by U.S enforcement agencies on crypto-crime.
Published At
1/5/2024 12:10:31 AM
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