Binance to Face Majority of US SEC Crypto Lawsuit, Judge Rules – Reuters

A federal judge has ruled that most of the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against Binance, the largest cryptocurrency exchange globally, can move forward.

This decision, made by Judge Amy Berman Jackson from the U.S. District Court for the District of Columbia, poses a challenge for Binance, which sought to have the SEC’s lawsuit dismissed. The SEC claims that Binance and its founder and former CEO, Changpeng Zhao, violated securities laws.

In its June 2023 lawsuit, the SEC accused Binance and Zhao of artificially inflating trading volumes, misappropriating customer funds, failing to restrict access for U.S. customers, and misleading investors regarding the platform’s market surveillance capabilities. Furthermore, the regulator alleged that Binance was unlawfully facilitating the trading of several crypto tokens that it considers unregistered securities.

This ruling compounds the difficulties for Binance, which has already agreed to pay $4.3 billion in November to settle allegations of illicit finance violations with the Department of Justice and the Commodity Futures Trading Commission.

However, Friday’s decision also represents a partial victory for the broader cryptocurrency industry, as the judge concurred with a previous ruling that the SEC did not sufficiently prove that secondary sales of Binance’s tokens—those sold by parties other than Binance on exchanges—should be classified as securities.