On June 28, Amy Berman Jackson, a judge at the US District Court for the District of Columbia, ruled that most of the SEC’s lawsuit against Binance and its co-founder could go ahead.
The SEC sued Binance and Zhao in June 2023 for mishandling customer funds, misleading investors and regulators, and violating securities regulations.
The company contested the claims and asked for the case to be dismissed in September with Binance lawyers stating at the time that the SEC was trying to “enlarge its jurisdiction globally to include transactions on foreign cryptocurrency platforms.”
Ten Counts Will Proceed
Judge Jackson ruled that out of 13 counts, 10 will proceed in full, two will partially proceed, and one will be dismissed, reported Bloomberg on June 29.
The dismissed count relates to sales of BUSD, the firm’s defunct stablecoin that was hit with regulatory action in February 2023 forcing issuer Paxos to stop minting them.
Part of a count concerning secondary sales of the exchange’s native BNB token by parties other than Binance was also dismissed.
Additionally, an allegation about Binance’s Simple Earn program, which enables users to earn interest on crypto assets, was dismissed, but the rest of that count proceeds.
This lawsuit is separate from the $4.3 billion penalty Binance faced in November 2023 for violations of anti-money laundering and sanctions laws.
The SEC and chair Gary Gensler still maintain that most crypto assets are securities but a series of lawsuits to enforce this stance have failed to settle the question or classification of digital tokens.
BNB didn’t react to the news and remained flat on the day, trading at $570 at the time of writing. Moreover, the asset has outperformed most altcoins in recent months, hitting an all-time high of $717 on June 6.
ConsenSys Fires Back
In related news, Ethereum software solutions provider ConsenSys hit back at the SEC on June 28 with a company statement which read:
“This is just the latest example of its regulatory overreach – a transparent attempt to redefine well-established legal standards and expand the SEC’s jurisdiction via lawsuit.”
Consensys fully expected the SEC to follow through on its threat to claim our MetaMask software interface must register as a securities broker. The SEC has been pursuing an anti-crypto agenda led by ad hoc enforcement action.
This is just the latest example of its regulatory…
— Consensys (@Consensys) June 28, 2024
In its latest salvo against the crypto industry this week, the SEC accused ConsenSys of selling unregistered securities through its MetaMask staking service.