By: Eva Baxter
A federal judge has ruled that most of the U.S. Securities and Exchange Commission (SEC) case against Binance, Binance.US, and its CEO Changpeng Zhao (CZ) can move forward. The decision, made by Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia, permits 10 out of 13 counts in the lawsuit to proceed, while dismissing one count outright and other parts partially.
The SEC's claims against Binance and CZ primarily involve allegations of mishandling customer funds, providing misleading information to investors and regulators, and violations of federal securities laws. These allegations were further substantiated when the SEC used unsealed records from Binance and CZ’s plea deals with other regulatory bodies like the Financial Crimes Enforcement Network (FinCEN) and the Department of Justice (DOJ). Notably, these plea deals had earlier resulted in a historic fine of $4.3 billion for Binance.
Certain counts related to the sale of the now-defunct stablecoin Binance USD (BUSD) and secondary sales of Binance's native token (BNB) were dismissed. The BUSD count was dismissed because Binance's issuing partner, Paxos, ceased minting the stablecoin under regulatory pressure from the New York Department of Financial Services (NYDFS) earlier this year. Additionally, the secondary sales of BNB by third parties were also dismissed. Currently, BNB has a market cap of over $84 billion with over 147 million tokens circulating.
The SEC's legal actions continue to shape the crypto landscape, with the regulatory body also filing a lawsuit against Consensys recently, targeting its MetaMask wallet’s swapping and staking features for allegedly violating securities laws. These actions have drawn considerable criticism from the crypto industry and several members of Congress, who argue that the SEC is overreaching its jurisdiction.
Read more here.