- On January 22, the District Court for the State of Columbia held a hearing on Binance's motion to dismiss the SEC's lawsuit.
- Judge Amy Berman Jackson heard the parties' arguments over whether various Binance tokens and services constitute investment contracts or securities.
- Previously, the hearing in this case was postponed due to bad weather in the region.
On January 22, 2024, a hearing was held in the District Court for the State of Columbia on Binance's motion to dismiss the US Securities and Exchange Commission's (SEC) lawsuit. This is reported by The Block with reference to court materials.
During the meeting, Binance's lawyers criticized the SEC for its handling of cryptocurrencies under the current legal and regulatory framework. According to them, the regulator takes a “contradictory approach to cryptocurrency companies, requiring them to register and at the same time preventing them from doing so.”
The document claims that the SEC has not presented arguments that various Binance tokens and services are securities.
Exchange representatives insisted that to obtain this status, an asset must have a real contract. However, Judge Amy Berman Jackson questioned the weight of this argument:
“According to the Howey test, an investment contract is a contract, transaction or scheme. One of three things. It doesn’t talk about a contract deal or scheme,” Jackson said.
We would like to remind you that the judge previously ordered a review to determine whether cryptoassets can be considered securities. Subsequently hearing moved due to bad weather in the region.
SEC officials disagree that the agency made contradictory statements. As an argument, they cited recommendations that the agency has issued over the years.
“The Howey test provides a clear answer, and you don't need a regulator to specifically come to you and remind you that you may be violating securities laws,” the SEC lawyer said.
According to the regulator, the crypto exchange’s constant promotion of its business and the BNB and BUSD tokens it issued created “an expectation of profit for the people who bought these tokens.”
The Commission argued that the BUSD stablecoin should be considered a security because it was offered in conjunction with other services that allowed users to earn income from their assets.
Judge Jackson noted that she had doubts that the Binance team correctly interpreted Howey's definition of an investment contract.
Lawyer Jeremy Hogan later reported that Binance was in a difficult position because even the judge “implicitly sided with the SEC.”
“The judge does not believe either Binance's fair notice defense or its arguments under the fundamental issues doctrine, and she is open about it,” he said.
Recall that the SEC filed a lawsuit against the platform in early June 2023. The regulator accused the global exchange, its US subsidiary and former CEO Changpeng Zhao of trading without a license.