On June 28, U.S. District Court Judge Amy Berman Jackson ruled that the SEC’s lawsuit against Binance and its co-founder could largely proceed.
The SEC sued Binance and Zhao in June 2023 for mismanaging customer funds, misleading investors and regulators, and violating securities regulations.
The company denied the allegations and filed a motion to dismiss the lawsuit in September. Binance’s lawyers said at the time that the SEC was trying to “expand its jurisdiction globally to include transactions on foreign cryptocurrency platforms.”
Ten charges are brought
Judge Jackson ruled that of 13 charges, 10 would be fully pursued, two would be partially pursued and one would be dismissed, Bloomberg reported on June 29.
The dismissed charge relates to sales of BUSD, the company’s defunct stablecoin that was caught up in regulatory action in February 2023 that forced issuer Paxos to cease minting.
Part of a charge regarding secondary sales of the exchange’s native BNB token by parties other than Binance was also dismissed.
In addition, an allegation related to Binance’s Simple Earn program, which allows users to earn interest on crypto assets, was dismissed; however, the rest of that charge remains.
This lawsuit is separate from the $4.3 billion fine imposed on Binance in November 2023 for violating anti-money laundering and sanctions laws.
The SEC and its chairman Gary Gensler still insist that most crypto assets are securities, but a series of lawsuits to enforce this stance have failed to clarify the issue or classification of digital tokens.
BNB did not react to the news and remained unchanged on the day, trading at $570 at the time of writing. Moreover, the asset has outperformed most altcoins in recent months, reaching an all-time high of $717 on June 6.
ConsenSys strikes back
In related news, Ethereum software solutions provider ConsenSys hit back on June 28 with a company statement saying:
“This is just the latest example of SEC over-regulation – a transparent attempt to redefine established legal standards and expand the SEC’s jurisdiction through litigation.”
In its latest salvo against the crypto industry this week, the SEC accused ConsenSys of selling unregistered securities through its staking service MetaMask.
