Cryptocurrency exchange Binance failed to persuade a U.S. court to dismiss most of the claims brought by U.S. securities regulators.
Judge Amy Berman Jackson said in a court filing on June 28 that the lawsuit will proceed regarding Binance’s staking program, the sale of BNB (BNB) after its initial coin offering, and alleged anti-fraud violations.
The securities regulator will also argue that former Binance CEO Changpeng ‘CZ’ Zhao acted as a “controller” and that Binance was required to register under exchange laws.
But the Securities and Exchange Commission did not win outright. Jackson ultimately decided to dismiss the claims for BNB secondary market sales and all sales related to the Binance USD (BUSD) stablecoin.
Jackson cited Judge Analisa Torres’ ruling in the SEC case against Ripple to support the SEC’s decision to dismiss the BNB secondary market sale claim.
Financial lawyer Scott Johnsson was surprised, calling it a “big loss” for securities regulators.
FOX Business reporter Eleanor Terrett expects lawyers for Coinbase, Kraken, and Consensys to “use this opinion to bolster their positions in their own lawsuits.”
The SEC’s claims regarding Binance’s passive income feature, “Simple Earn,” were also rejected by Jackson.
Jackson is scheduled for a court hearing on July 9.
The SEC, led by Gary Gensler, sued Binance in June 2023, alleging that Binance was offering to sell unregistered securities and operating illegally in the United States.
Binance and CZ filed a lawsuit about three months later seeking to dismiss the SEC lawsuit, claiming the SEC had violated its legal rights.
Related: Binance fined $2.25 million by India’s Financial Intelligence Unit
Seven U.S. states, including Alaska, Florida, Maine, and North Carolina, canceled or did not allow Binance to renew its remittance license.
Meanwhile, CZ is currently serving a four-month prison sentence for violating the Money Laundering Act.
Despite the lawsuit, Binance remains the world’s largest cryptocurrency exchange, with over 200 million users and $100 billion in assets under management.
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