Binance has recorded a milestone legal victory in what is a significant development to the broader crypto industry. This excitement comes as a US federal court recently dismissed some claims made by the Securities and Exchange Commission (SEC) against the exchange.
Significant Verdicts on Token Status
As per the ruling, the federal court granted three notable judgments on the status of Binance regarding its associated tokens. Interestingly, the judge ruled that crypto tokens do not qualify as securities. The ruling severely punctures the SEC’s case against Binance and has implications for its case against other crypto exchanges.
In a victory for the industry, a US federal court dismissed several #SEC claims against #Binance, ruling that:
1) Crypto tokens are not securities,
2) BNB sales on secondary exchanges were not adequately alleged to be securities,
3) BUSD is not a security.
Read more ⤵️…
— Binance (@binance) July 2, 2024
Additionally, the Judge said sales of BNB on some secondary exchanges do not constitute securities. The presiding judge disagreed with the SEC’s submission that since BNB tokens were initially sold as investment contracts, subsequent sales would be considered a sale of a security. However, the judge held that each secondary transaction’s specific details and context must be considered.
Similarly, the court ruled that BUSD is not considered a security. These three rulings mark a noteworthy win for Binance. However, legal experts consider it has further implications for the broader crypto industry as it will serve as precedence in other cases.
Broader Implications for Binance and the Crypto Industry
Analysts consider the legal victory as a respite for Binance with a much-needed boost amidst its ongoing legal challenges. It also sets a significant legal precedent that could influence future regulatory actions and court decisions concerning other cryptocurrency exchanges and tokens.
Notably, the exchange has been plagued by negative legal publicity following the sentencing of its founder and former CEO, Changpeng ‘CZ’ Zhao to A four-month jail term.
Meanwhile, in Nigeria, two of Binance’s executives are standing trial at a Federal High Court in Abuja. At the last sitting, the presiding judge, Justice Emeka Nwite, decided that one of them, Tigran Gambaryan posed a flight risk as his colleague, Nadeem Anjarwalla, had previously escaped to Kenya.
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