Binance’s Partial Win in SEC Case: Discovery Phase Concludes

Binance’s Partial Victory in SEC Lawsuit: Key Developments and Implications

Binance has secured a partial victory in the SEC lawsuit as claims related to BUSD, Simple Earn, and secondary BNB sales were dismissed. Judge Amy Berman Jackson’s ruling supports the doctrine that crypto tokens and programmatic sales are not securities. This ruling could significantly impact future regulatory actions and the crypto market’s legal landscape.

Key Court Rulings

Judge Jackson issued several minute orders to conclude the discovery phase. The court dismissed the SEC’s claims regarding:

• BUSD sales
• Simple Earn
• Secondary BNB sales

According to court filings, Judge Jackson has asked the parties to file a joint submission by July 29 for further proceedings. Binance and the SEC must set deadlines for any motion to amend the complaint or seek relief from the recent motion to dismiss the decision.

Growing Legal Tensions and Proceedings

Parties seeking amendments or relief must submit plans for how discovery would proceed if such motions are filed. They must also consider whether discovery should occur in phases. Additionally, a minute update on scheduling conference proceedings was added to the docket for meeting and conferring on filing a joint submission by the court’s deadline.

Market Reactions

Binance’s partial victory has sparked positive sentiment in the crypto market. The judge indirectly sided with Judge Torres’ doctrine on crypto secondary sales and programmatic sales not being securities. The court ruled that:

• Crypto tokens are not securities
• Sales of BNB on secondary exchanges were not sufficiently alleged to be securities
• Stablecoin BUSD was also not classified as a security, based on US DOJ filings in the Mango Markets lawsuit that contradicted the SEC’s stance

Implications and Future Actions

Although the motion to dismiss by Binance.US was rejected, the exchange remains vigilant and prepared for the next phases of this legal journey. This latest development follows Binance’s recent victory over the SEC, where the court dismissed several charges against the exchange. The court ruled that the SEC did not provide enough evidence to prove that BNB’s secondary market sales were securities transactions. However, the court upheld other charges, including those related to the initial token offering and ongoing sales.

The SEC sued Binance and its CEO last year over alleged wrongdoings, including diverting customer funds and misleading investors. The SEC also claimed that Binance inflated trading volumes and failed to prevent US customers from using its platform. Additionally, the SEC alleged that Binance allowed the trading of financial products that were not properly registered.

Industry Reactions and Regulatory Impact

The CEO and co-founder of Enumma, David Barrera, proposed that the SEC revise its initial complaint to make a stronger argument. This could indicate that the SEC is looking for more proof before filing new allegations against Binance. The legal battle between the SEC and Binance is part of a bigger effort to tighten rules on the cryptocurrency market. Coinbase and Kraken, two more well-known Bitcoin exchanges, have both been the target of similar measures.

Others think that even if the SEC works to stop money laundering and the funding of terrorist groups, this legislation may hinder innovation in the Bitcoin space. Due to allegations, including money laundering, Binance has been prohibited by several countries. As the Binance case moves forward, the cryptocurrency industry expects more clarity in cryptocurrency regulations.