- Binance and the SEC went head to head in court as the exchange sought a dismissal.
- Arguments from both parties came under significant scrutiny from Judge Amy Berman Jackson.
- Onlookers believe an outright win may prove elusive for both parties.
In June 2023, the SEC sent shockwaves through the crypto industry by launching an enforcement action against Binance, the world’s largest crypto exchange, escalating what many have described as a war against crypto in the U.S. Amid a move from Binance to dismiss the case, Judge Amy Berman Jackson heard oral arguments on Monday, January 22. At the center of the arguments were whether the SEC had jurisdiction over crypto markets and whether crypto assets were unregistered securities.
Following the oral tug-of-war, onlookers increasingly believe that the exchange’s quest for dismissal will likely end in a mixed decision.
Judge Weighs Binance and SEC Arguments
In motions to dismiss, Binance had argued that the SEC had overstepped its bounds with the lawsuit. In response, however, the agency slammed the exchange’s claims as lacking substance.
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In the January 22 hearing, Judge Jackson questioned both parties, starting with the defense. She poked holes in the exchange’s major questions doctrine and lack of jurisdiction arguments, expressing that the major questions doctrine argument was only relevant in cases of broad economic significance. She also pointed out that the SEC was not in charge of a specific industry.
Nonetheless, it was far from a landslide for the SEC. Controversial arguments that crypto assets represented the embodiment of investment contracts attracted scrutiny from Judge Jackson, who grilled the agency on the boundary of crypto asset securities.
A Partial Dismissal?
Following the hearing, some onlookers championed the possibility of a partial dismissal. The judge appeared to lean towards the idea that Binance initially sold BNB as an investment contract while resisting the idea that tokens still maintained their security status when they traded on the secondary market. Such an outcome could see the continuation of the case only based on Binance’s initial BNB sales.
These predictions are further bolstered by Judge Jackson’s apparent support of Judge Analisa Torres’ ruling in the Ripple case, which asserted that XRP did not represent a security, nor did its secondary market sales.
On the Flipside
- A ruling on Binance’s motion to dismiss is expected in June 2024.
- Observers have suggested that Coinbase fared more favorably than Binance in their hearing against the SEC.
Why This Matters
The SEC case against Binance is one of the most high-profile crypto lawsuits. The case outcomes will likely set precedents for how crypto assets will be treated in the U.S.
Read this for more on Binance’s motion to dismiss:
CZ, Binance, and U.S. Affiliate File to Dismiss SEC Lawsuit
Learn more about ONDO:
What Is ONDO and Why Is the Token up 2,500% Since Unlock?
