Home CryptocurrencyBitcoin The judge in the SEC v. Binance will hear arguments about whether cryptocurrencies are a security

The judge in the SEC v. Binance will hear arguments about whether cryptocurrencies are a security

by SuperiorInvest

Federal Judge Amy Berman Jackson, overseeing the U.S. Securities and Exchange Commission’s (SEC) case against Binance, Binance.US and former CEO Changpeng Zhao, ordered a judicial review to determine whether digital assets are values.

In a minute dated Jan. 18 in the U.S. District Court for the District of Columbia, Judge Jackson said she would hear arguments about how the SEC treated cryptocurrencies under current legal and regulatory frameworks. Lawyers representing Binance.US will be able to address “whether a digital asset remains a security in perpetuity” and the SEC’s allegations that staking can be considered a security.

“The Court intends to hear arguments on [whether an investment contract must involve a contractual undertaking and] whether the SEC ‘misinterprets the meaning of “scheme” in Howey,’ from a single defense attorney,” Judge Jackson said. “Similarly, although both memoranda address the main issues of the doctrine, and both raise substantive questions about whether litigation is the appropriate way for the SEC to proceed with oversight of the crypto industry, counsel should be assigned to defend that issue for the defense. “

Jan. 18 order from Judge Amy Berman Jackson. Source: Court Listener

The Howey test has been the SEC’s standard for determining what a security is, that is, when determining whether an asset meets the definition of an investment contract. Judge Jackson raised the issue, assuming it would need to be addressed in the Binance case over tokens including BNB (BNB) and Binance USD (BUSD). It is unclear when both sides will present arguments on the matter.

Related:SEC asks court to consider Terraform Labs ruling in Binance case

In many of its legal actions against American crypto companies, the SEC has asserted that the tokens largely qualify as securities and are subject to regulatory oversight by the commission rather than the Commodity Futures Trading Commission. In July 2023, a judge overseeing the SEC case against Ripple ruled that the XRP token was not a security related to programmatic sales on digital asset exchanges.

Since the Ripple ruling, lawyers for Coinbase, which is also facing a lawsuit brought by the SEC, cited precedent from the case in an August 2023 motion to dismiss. In other cases, the SEC has responded, arguing in its lawsuit against Terraform Labs and Do Kwon that whether certain tokens were securities was a “legal question” for a court, “not a factual question for the jury.”

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