The United States Securities and Exchange Commission has filed a motion in federal court asking a judge to consider a summary judgment ruling in its case against crypto exchange Binance.
In a Jan. 3 filing in the U.S. District Court for the District of Columbia, the SEC said a Dec. 28 ruling in the commission’s case against Terraform Labs and its co-founder Do Kwon had a “number of issues” similar to its enforcement action against Binance, Binance.US and former CEO Changpeng Zhao. In the Terra case, Judge Jed Rakoff largely sided with the SEC, ruling that specific tokens involved in the alleged fraud were securities “because they are investment contracts” and “offers and sales of UST constituted an investment contract.”
“The court’s analysis of the Terraform defendants’ so-called ‘stablecoin’ UST is particularly relevant to this Court’s consideration of Defendants’ arguments concerning Binance’s so-called ‘stablecoin’ BUSD, and Defendants’ staking-as-a service, BNB Vault, and Simple Earn programs,” said the Jan. 3 filing.
The SEC argued the Terraform Labs judgment provided “further grounds” on which Judge Amy Jackson could consider denying a motion to dismiss from Binance. The crypto exchange and Zhao filed a motion to dismiss in September on the grounds the SEC had overreached on its authority and imposed its standards on securities “retroactively.”
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The commission’s case is one of the last from financial regulators in the U.S. following a $4.3 billion settlement between Binance and the Commodity Futures Trading Commission, Justice Department, and Treasury Department announced in December. As part of the settlement, Zhao agreed to plead guilty to one felony count, for which he will be sentenced in February.
The Terraform Labs and Binance cases are just two enforcement actions brought by the SEC in 2023 alleging the platforms offered unregistered securities. The commission also filed lawsuits against Coinbase, Ripple, Kraken and others.
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