Judge Rules Binance Must Address Majority of US SEC Crypto Lawsuit, Reports Reuters

A federal judge ruled late Friday that most of the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance, the largest cryptocurrency exchange in the world, can move forward.

This ruling from Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia is a setback for Binance, which sought to have the SEC’s lawsuit dismissed. The lawsuit claims that Binance and its founder, Changpeng Zhao, violated securities laws.

The SEC’s lawsuit, initiated in June 2023, accuses Binance and Zhao of artificially inflating trading volumes, misappropriating customer funds, inadequately restricting U.S. customers from accessing its platform, and misleading investors regarding its market surveillance measures.

Additionally, the regulator alleges that Binance unlawfully facilitated the trading of several cryptocurrencies that it considers unregistered securities.

This ruling adds to the challenges facing Binance, which had previously agreed to pay $4.3 billion in November to settle allegations involving illicit financial practices with the Department of Justice and the Commodity Futures Trading Commission.

Nevertheless, Friday’s decision represents a partial victory for the broader cryptocurrency industry, as the judge concurred with an earlier ruling stating that the SEC had not established its case that secondary sales of Binance’s tokens—those sold by sellers other than Binance on exchanges—count as securities.