In the SEC v Binance case, a judge will hear arguments about whether crypto is a security.

Federal Judge Amy Berman Jackson, who is overseeing the United States Securities and Exchange Commission (SEC) case against Binance, Binance.US and former CEO Changpeng Zhao, has ordered the court to investigate whether the digital assets are securities.

In a January 18 minute order issued by the U.S. District Court for the District of Columbia, Judge Jackson said she will hear arguments on how the SEC should treat cryptocurrencies under the current regulatory and legal framework. Lawyers representing Binance.US are allowed to speak about “whether the digital asset is permanently secure” and the SEC's allegation could be considered a security.

“The court intends to hear the argument [whether an investment contract must involve a contractual undertaking and] Judge Jackson stated that the SEC ‘misunderstood the meaning of “scheme” in Howie only from one defense attorney. An attorney must be assigned to defend that case. “

The Hawaii test has long been the SEC's standard for determining what constitutes a security, determining whether an asset meets the definition of an investment. Judge Jackson took up the case, thinking it should be filed against tokens including BNB (BNB) and Binance USD (BUSD). It is not clear when either side will present arguments in the case.

Related: SEC Asks Court to Review Terraform Labs Ruling in Binance Case

In most of its legal actions against US crypto companies, the SEC has said that tokens mostly qualify as securities and are subject to regulatory oversight by the commission instead of the Commodity Futures Trading Commission. In July 2023, a judge overseeing the SEC's case against Ripple ruled that the XRP token was not a security for programmatic sales on the digital asset exchange.

Since Ripple's decision, Coinbase's lawyers – also in the face of a lawsuit brought by the SEC, have cited a precedent from the case in August 2023. In other cases, the SEC has pushed back, arguing in its lawsuit against Terraform Labs and Do Kwon that whether certain tokens are securities is a “legal question” for the court, not “a valid question for the jury.”

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