Cryptocurrency exchange Binance has failed to convince a United States court to dismiss most claims made against it by the country’s securities regulator.
Claims related to Binance’s staking program, the sale of BNB (BNB) after its initial coin offering and anti-fraud violations will proceed, Judge Amy Berman Jackson stated in a June 28 court filing.
The security regulator’s claim that former Binance CEO Changpeng “CZ” Zhao acted as a “control person” will also proceed, as will its claim that Binance was obligated to register under the Exchange Act.
But it wasn’t a clean sweep for the Securities and Exchange Commission (SEC) — with Jackson ultimately deciding to dismiss claims related to BNB secondary market sales and all sales related to the Binance USD (BUSD) stablecoin.
Jackson cited Judge Analisa Torres’ ruling in the SEC’s case against Ripple to support her decision to dismiss the SEC’s BNB secondary market sales claim.
It took finance lawyer Scott Johnsson by surprise, who described it as a “big loss” for the securities regulator.
Fox Business reporter Eleanor Terrett expects lawyers at Coinbase, Kraken and Consensys will “use this opinion to bolster their positions in their own litigations.”
Jackson also knocked back the SEC’s claims related to Binance’s passive income feature “Simple Earn.”
Jackson scheduled a court hearing for July 9.
The Gary Gensler-led SEC sued Binance in June 2023, claiming Binance offered the sale of unregistered securities and was operating illegally in the United States.
Binance and CZ filed to dismiss the SEC lawsuit about three months later, arguing that the SEC exceeded its legal authority.
Related: Binance fined $2.25M by India’s Financial Intelligence Unit
Seven U.S. states, including Alaska, Florida, Maine and North Carolina, have either revoked or denied Binance the right to renew its money transmitter license.
Meanwhile, CZ is currently serving a four month prison sentence for violating money laundering laws.
Despite the lawsuit, Binance remains the largest cryptocurrency exchange in the world, with over 200 million users and $100 billion in assets under management.
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