A US judge has rejected key arguments made by the SEC in its lawsuit against cryptocurrency exchange Binance.
Binance noted on the 2nd that a federal judge has rejected several key arguments made by the SEC, strengthening the company's defense in the legal battle.
The court's ruling rejected the argument that crypto assets, including Build and Build (BNB) and the US dollar stablecoin BUSD, could be classified as securities.
Judge Amy Berman Jackson of the US District Court for the District of Columbia dismissed the SEC's arguments, ruling that the tokens do not meet the criteria for securities.
In addition, the court rejected the SEC's argument that secondary market sales of Build and Build on cryptocurrency exchanges constitute securities transactions. In addition, the court criticized the SEC's argument that crypto assets are essentially investment contracts.
A statement from Binance said the ruling should focus on the circumstances surrounding each transaction, not the tokens themselves.
In a statement, Binance blamed the SEC for failing to provide sufficient evidence that Build and Build’s secondary market sales were made with the expectation of profit, a key element of the Howey Test for classifying something as a security.
As for BUSD, the court reportedly rejected the SEC’s argument that it was an investment contract. There was no evidence to show that BUSD was sold with the expectation of profit through Binance’s efforts, the exchange added.
Major hurdles to test continuing SEC claims
While the court rejected the SEC’s arguments, it allowed the trial to continue on certain elements, such as the argument regarding the direct sale of BNB as a securities exchange.
There are reportedly major hurdles to test remaining claims, as the SEC needs to prove that token purchases were made with the expectation of investment.
Amid these developments in the courts, Binance has already restricted certain services to comply with the new European cryptocurrency regulation, MiCA.
Reference: Post
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