The recent litigation between the U.S. Securities and Exchange Commission (SEC) and Binance took an interesting turn when the SEC filed a notice of supplemental authority, citing the ruling. SEC vs. Terraform Labs As an important precedent.
The SEC’s strategic move aims to leverage the Terra ruling against Binance, Binance.US, and its former CEO. Changpeng ‘CZ’ Zhao.
However, Bill Morgan, a legal expert known for his pro-crypto stances, argues that Terraform Labs’ decision may not be directly related to the SEC’s lawsuit against Binance and Coinbase.
Terra ruling in Binance and Coinbase lawsuit
Dave Weisberger, Co-CEO of CoinRoutes I left a comment. The Terra case highlighted the key focus on marketing UST, LUNA, and Yield through the Anchor Protocol. GwondoCo-founder and former CEO of Terraform Labs.
Weisberger emphasized that the case is concerned with defining the investment contract rather than the token itself. This perspective is important in understanding the SEC’s claims and their potential impact.
Bill Morgan agrees with Weisberger’s assessment. declaration The application of Howey’s test in the Terraform Labs case may be as unique and independent as Torres’ decision to sell Ripple’s XRP.
Morgan suggests that the Terra ruling may have limited relevance and persuasiveness in the context of the Coinbase and Binance lawsuits.
Morgan emphasizes that legal cases are often decided based on specific facts. This is especially true in the following cases: major legal issues Sensitive to specific situations. Morgan says it will be interesting to see which cases are more persuasive in similar cases in the future.
SEC’s Reliance on Terra Case
like reported According to Bitcoinist, the SEC’s argument centered around the Terra case’s interpretation of the definition of an “investment contract” within a cryptocurrency product.
The SEC argues that the court’s application of the Howey Test to classify UST, LUNA, wLUNA, and MIR as investment contracts and securities is directly related to the products and services provided by Binance.
These include Binance USD (BUSD), staking service BNB Vault, and the Simple Earn program. The SEC emphasizes that the Terra decision should influence the court’s decision. Binance’s consent to dismissalDefendant BAM Trading Inc. and BAM Management US Holdings Inc.
Contrary to the SEC’s position, Bill Morgan’s analysis challenges the notion that the Terra ruling applies directly to the SEC’s lawsuits against Binance and Coinbase.
Morgan opposes the SEC’s attempt to expand its rulings on digital assets and services offered by exchanges, arguing that tokens and services fall outside the scope of securities laws.
Morgan’s perspective questions the SEC’s approach and emphasizes the need to carefully examine the specific facts and legal issues involved in each case.
As the legal battle between the SEC and two of the world’s most important cryptocurrency exchanges progresses, courts will need to carefully consider the factual and legal arguments presented by both sides to determine the applicability and persuasive value of the Terra decision.
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