US judge partially allows lawsuit against Binance and Changpeng Zhao
Judge Amy Berman Jackson supports many of the SEC's claims against Binance, even though the crypto exchange won partial victories in some areas.
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Federal Judge Amy Berman Jackson of the District Court of Columbia has admitted part of the charges brought by the US Securities and Exchange Commission (SEC) against the crypto exchange Binance and its founder Changpeng Zhao.
The SEC had accused Binance, Binance.US and Zhao of offering unregistered brokerage, trading and clearing services for digital securities in the US. The regulator also brought similar charges against Coinbase, Kraken, Consensys and MetaMask.
As Coindesk reports, on Friday Judge Jackson ruled that the SEC's charges against Binance for its initial coin offering and ongoing sales of BNB, BNB Vault and staking services, as well as for failure to register and fraud allegations, can proceed. It also denied Binance and Zhao's motion to dismiss the charges related to the secondary BNB sales and Simple Earn.
The SEC charges against former Binance CEO Changpeng "CZ" Zhao also remain in place. He is accused of acting as a "controlling person". Zhao is currently serving a 4-month prison sentence for, among other things, failing to implement anti-money laundering measures on the platform. These proceedings were initiated by the US Department of Justice and the US Treasury Department. The SEC is still conducting separate proceedings against him, which are separate from the criminal charges.
The SEC is also pursuing its allegation that Binance should have registered for various trading activities under the Exchange Act.
Partial success for Binance
However, the SEC did not achieve complete success and was unable to prevail on some counts. Judge Jackson ruled to dismiss the claims regarding BNB's secondary market sales and all sales related to the Binance USD (BUSD) stablecoin.
The judge referred to Judge Analisa Torres' 2023 ruling in the SEC v. Ripple Labs case. She emphasized that the economic form of the token transactions is decisive for the application of securities law. Jackson scheduled the next hearing in the case for July 9.
(usz)
