The court allows most of the SEC’s claims in the Binance suit to proceed
Cryptocurrency exchange Binance failed to convince a US court to dismiss most of the claims brought by the country's securities regulator.
Claims related to Binance's staking program, the sale of BNB after its initial coin offering and anti-fraud violations will continue, Judge Amy Berman Jackson said in a June 28 court filing.
The security watchdog's claims that former Binance CEO Changpeng ‘CZ' Zhao acted as a “supervisory person” will continue, as will Binance's obligation to register under the Exchange Act.
But it wasn't a clean sweep for the Securities and Exchange Commission — Jackson ultimately decided to dismiss claims related to the secondary market sale of BNB and the Binance USD (BUSD) stablecoin.
Jackson cited Judge Analisa Torres' decision in the SEC case against Ripple to support her decision to deny the SEC's BNB secondary market sale request.
It impressed financial lawyer Scott Johnson, who described it as a “huge loss” to the securities regulator.
Fox Business reporter Eleanor Terrett expects lawyers at Coinbase, Kraken and Consensys to “use this opinion to strengthen their position in their own litigation.”
The SEC's claims regarding Binance's passive income feature “easy income” were also answered by Jackson.
Jackson has a court date set for July 9.
The SEC, led by Gary Gensler, sued Binance in June 2023, alleging that Binance offered to sell unregistered securities and was operating illegally in the United States.
Binance and CZ filed to drop the SEC lawsuit three months later, claiming that the SEC exceeded its legal authority.
Related: Binance Fined $2.25M by India's Financial Intelligence Unit
Seven US states have revoked or denied Binance's money transfer license – including Alaska, Florida, Maine and North Carolina.
Meanwhile, CZ is currently serving a four-month prison sentence for violating money laundering laws.
Despite the allegations, Binance remains the largest cryptocurrency exchange in the world with over 200 million users and $100 billion in assets under management.
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