SEC Modifies Strategy In Legal Battle With Binance Following Terra Ruling

In the lawsuit between the US Securities and Exchange Commission (SEC) and Binance, the regulator has filed a notice of supplemental authority, citing the judgment in SEC v. Terraform Labs as a key precedent. This move is a strategic effort by the SEC to leverage the Terra ruling in its case against Binance, Binance.US, and former CEO Changpeng ‘CZ’ Zhao.

 

Post-Terra Ruling: SEC’s Adjusted Tactics in Legal Battle with Binance

  1. SEC’s Strategic Move: The SEC, in the ongoing legal dispute with Binance, shifts tactics by filing a notice of supplemental authority, relying on the judgment in SEC v. Terraform Labs as a crucial precedent.
  2. Legal Basis: The SEC’s argument centers on the Terra case’s interpretation of the “investment contract” definition in cryptocurrency offerings. It contends that the classification of certain tokens as investment contracts in Terra is directly relevant to Binance’s products and services.
  3. Relevance to Binance’s Offerings: The SEC draws parallels between the Terra case and Binance’s offerings, including BUSD stablecoin, BNB Vault, and Simple Earn program, asserting that they fall under securities law.
  4. Challenge to Dismissal: Emphasizing the relevance of the Terra ruling, the SEC aims to influence the court’s decision on Binance’s motion to dismiss, indicating a broader narrative of increased regulatory scrutiny on crypto exchanges.
  5. Internal Impact on Binance: The legal battle prompts internal changes at Binance.US, with CEO Brian Shroder resigning, layoffs affecting one-third of the workforce, and founder Changpeng Zhao stepping down as CEO, restricted from leaving the United States.
  6. Broader Regulatory Landscape: The case signifies a pivotal moment in the evolving regulatory landscape of cryptocurrencies in the United States, with implications for the entire industry. Both the SEC’s cases against Binance and Coinbase are landmark cases set to conclude this year, shaping the future of crypto regulation.
  7. Market Impact: At the time of reporting, BNB is trading at $323.4, with a focus on breaking the 0.618 Fib on the 1-day chart.

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