HomeBinanceSEC files lawsuit against Binance staking, BNB price rises despite legal challenges

SEC files lawsuit against Binance staking, BNB price rises despite legal challenges

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Federal Judge Allows Majority of SEC Lawsuit Against Binance to Proceed

In a recent court ruling, Judge Amy Berman Jackson of the District Court for the District of Columbia has allowed the majority of a lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against Binance, the world’s largest cryptocurrency exchange, to proceed. The judge dismissed the SEC’s claims that the secondary sale of Binance coins qualified as securities but allowed the SEC to pursue claims associated with Binance’s BNB staking program.

The charges against Binance include violations related to the initial coin offering and ongoing sales of BNB, their BNB Vault and staking services, as well as a failure to register and potential fraudulent activity. This decision is seen as a blow to Binance, as it suggests the court believes the SEC has a strong case regarding these specific offerings and actions.

However, the judge did grant Binance and its founder, Changpeng Zhao, dismissal of charges tied to secondary sales of BNB and their Simple Earn program. This lawsuit originated last summer when the SEC accused Binance, Binance US, and Zhao of offering unregistered securities and financial services within the U.S.

The judge’s decision aligns with previous court rulings that carefully distinguish between investment contracts considered securities and the underlying tokens themselves. This distinction is in line with the Supreme Court’s definition of a security. The judge also rejected arguments that the SEC lacks authority due to the “major questions doctrine,” strengthening the SEC’s ability to pursue enforcement actions in the cryptocurrency space.

The SEC case against Binance is separate from the criminal charges brought against Binance founder Changpeng Zhao by the Department of Justice and Treasury Department, for which he is currently serving a 4-month sentence. The regulatory scrutiny surrounding the cryptocurrency industry is growing, as evidenced by similar charges brought against other major cryptocurrency companies like Coinbase, Kraken, Consensys, and MetaMask.

At press time, BNB was trading at $574.38, with a 0.53% price increase in the last 24 hours. The volume at which it was trading had decreased by 10.47%. The court ruling and ongoing legal battles have implications for Binance and the broader cryptocurrency industry, highlighting the importance of regulatory compliance in this rapidly evolving space.

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