SEC vs. Binance: Legal Showdown Intensifies Over Howey Test

As per the latest developments, the SEC has opposed Binance’s motion to dismiss the lawsuit continuing between the SEC and Binance. 

Plead To Dismiss SEC Allegations

John Reed Stark, a former SEC enforcement officer, highlights recent social media platform X changes. In an attempt to dismiss the U.S. Securities and Exchange Commission’s allegations against Binance and its CEO, Changpeng “CZ” Zhao, the defendants submitted court documents in September.

In its case, Binance and Zhao contended that the agency had gone ultra-vire to its authority. The U.S. Securities and Exchange Commission (SEC) suffered a setback in September when it could not obtain permission to investigate the software that Binance.US was using. Since filing a lawsuit against the American exchange, its foreign partner Binance Holdings, and its CEO Changpeng Zhao in June, the SEC has stated that it has been unable to get information from Binance.US. 

While Binance maintains that BUSD was not provided as an investment contract because there is no chance of profit, the SEC alleges that Binance advertised and sold BUSD as an investment contract. Its value is anticipated to stay at $1, after all. 

The SEC further stated that the Binance defendants relied on the Ripple finding, which concluded that certain sales of bid/ask transactions were ‘blind’ and did not involve securities, to keep the buyers from knowing whether the money they paid went to Ripple or any other seller of XRP.