Binance, one of the world’s largest cryptocurrency exchanges, is facing significant legal hurdles as it battles a lawsuit filed by the United States Securities and Exchange Commission (SEC). On June 28, U.S. District Judge Amy Berman Jackson ruled that the majority of claims against Binance would proceed, marking a crucial development in the ongoing legal saga.
The SEC has accused Binance of multiple violations, including issues related to its staking program, the sale of Binance Coin (BNB) following its initial coin offering, and allegations of anti-fraud violations. Judge Jackson confirmed that these claims would move forward, along with the assertion that former Binance CEO Changpeng “CZ” Zhao acted as a “control person.” The court also upheld the SEC’s claim that Binance was required to register under the Exchange Act.
However, the court dismissed claims related to BNB secondary market sales and all transactions involving the Binance USD (BUSD) stablecoin. This decision was influenced by Judge Analisa Torres’ prior ruling in the SEC’s case against Ripple, setting a precedent that impacted the SEC’s stance on these particular claims.
Binance Faces Record Fine from India’s Financial Intelligence UnitThe mixed ruling surprised many in the legal community. Finance lawyer Scott Johnsson described the dismissal of some claims as a “big loss” for the SEC. Meanwhile, FOX Business reporter Eleanor Terrett speculated that legal teams at other major cryptocurrency platforms, such as Coinbase, Kraken, and Consensys, might leverage this opinion to strengthen their defenses in ongoing litigations.
Judge Jackson also dismissed the SEC’s claims related to Binance’s “Simple Earn” feature, which offers passive income opportunities for users. A hearing is scheduled for July 9, where further developments are expected.
In addition to the SEC lawsuit, Changpeng Zhao, the founder of Binance, is contending with legal issues of his own. Zhao recently received a four-month prison sentence for violating U.S. anti-money laundering laws. This sentence, handed down by U.S. District Judge Richard Jones, was significantly lighter than the three-year term sought by prosecutors.
Zhao had pleaded guilty last year to breaching anti-money laundering regulations. Prosecutors had argued for a harsher penalty, claiming that Binance operated with a “Wild West” mentality under Zhao’s leadership, failing to report suspicious activities potentially linked to terrorism and child exploitation.
