- The SEC vs. Binance Judge has called for a court review of whether digital assets are securities.
- Judge Jackson is interested in how the SEC uses existing regulatory frameworks within the crypto industry.
- Binance is slated to face the commission to answer the Judge’s questions regarding securities.
In the wake of the recent courtroom showdown between the US Securities and Exchange Commission (SEC) and Coinbase over the commission’s definition of a security, the presiding Judge in the SEC vs. Binance case has called upon both parties, aiming to settle the dispute and establish crystal clear definitions on pivotal matters, notably what qualifies as a security.
SEC vs. Binance Judge Calls for Crypto Clarity
In the ongoing case against Binance, Binance.US, and ex-CEO Changpeng ‘CZ’ Zhao, Federal Judge Amy Berman Jackson has called for a court examination of whether digital assets, including cryptocurrencies, are securities.
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In a minute order released on January 18, Judge Jackson highlighted the necessity for arguments regarding how the SEC interprets existing regulatory frameworks, specifically the Howey Test, in the context of the crypto industry.
The Howey Test is the SEC’s primary standard for identifying securities, playing a significant role in legal actions against various US crypto firms, including Ripple, Coinbase, and Binance.
In addition to seeking clearer definitions for key terms like “securities” and “staking,” Judge Jackson will entertain arguments from Binance’s defense on whether a digital asset remains a security in perpetuity. The SEC’s claims regarding staking as a potential security will also be examined.
Initially scheduled for January 19, the SEC vs. Binance courtroom showdown has been delayed due to a massive snowstorm. The latest update reveals that the crypto exchange is now slated to confront the SEC on Monday at 10 am Eastern time, according to an order signed by Judge Jackson.
On the Flipside
- The SEC argues that classifying certain cryptocurrencies as securities is essential for investor protection.
- The SEC has warned against altering the Howey Test, arguing it would unleash legal chaos.
Why This Matters
Throughout 2023, the SEC intensified its crackdown on crypto, using the Howey test extensively to classify numerous protocols and tokens as securities. Judge Amy Berman Jackson’s inquiries could provide much regulatory clarity, something the commission has struggled to do.
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