US Federal Court Rules Cryptocurrencies Not Securities: Victory for Binance
The cryptocurrency industry has just scored a major legal victory in the US federal court, with Judge Amy Berman Jackson ruling that cryptocurrencies and secondary sales of the BNB token do not constitute securities. This decision is a significant win for Binance.US, the US arm of the world’s largest cryptocurrency exchange, Binance, as it rejects several claims made by the US Securities and Exchange Commission (SEC).
Judge Jackson’s ruling is a blow to the SEC, which has been criticized for potentially stifling innovation in the cryptocurrency sector with its aggressive actions against exchanges. The ruling could have positive implications for other ongoing legal battles, such as the case between the SEC and Ripple.
The importance of the Howey test, a legal criterion used to determine if a transaction is an investment contract, was emphasized in Judge Jackson’s decision. The focus should be on the specific circumstances of each transaction, rather than categorizing cryptocurrencies themselves as securities.
Investors in the cryptocurrency sector can breathe a sigh of relief with this ruling, as the SEC had previously classified 68 cryptocurrencies as securities, including BNB in June 2023 during its cases against Binance and Coinbase.
The SEC vs. Binance case has been ongoing, with the SEC alleging securities violations against the exchange. Despite the absence of evidence of embezzlement, Binance was accused of violating anti-money laundering laws and agreed to pay a $4.3 billion fine. The next hearing in the case is scheduled for 9 July 2024, and Binance has stated that they are prepared for an extended period of legal investigation.
Overall, Judge Jackson’s ruling is a significant win for the cryptocurrency industry and could have far-reaching implications for how cryptocurrencies are regulated in the future.
