- A federal judge in SEC v. Binance ordered a review.
- Its task is to clarify whether cryptoassets can be classified as securities, and staking as investment contracts.
Federal Judge Amy Berman Jackson ordered conduct a check to determine whether cryptoassets can be considered securities. She is overseeing the US Securities and Exchange Commission (SEC) case against the Binance exchange and its US subsidiary.
The ruling states that the parties will be able to present their arguments, on the basis of which the judge intends to clarify a number of points:
- The SEC gets the “Howey test” right;
- whether the regulator can use litigation as a tool to regulate the industry;
- whether cryptoassets fall within the definition of securities, both during primary and secondary sales;
- whether staking applies to them;
- whether the investment contract should include a contractual obligation between the parties to the transaction.
The resolution states that only one lawyer can speak for the defense. A meeting date on this issue has not been set at the time of writing.
The commission filed the lawsuit against Binance, Binance.US and the former head of the global exchange, Changpeng Zhao, in early June 2023. At the same time, the regulator noted crypto-assets with a capitalization of more than $115 billion as securities.
In November 2023, the exchange agreed to pay a fine of $4.3 billion to settle a dispute with the Justice Department, the Treasury Department and the US Commodity Futures Trading Commission. These are separate cases, and a hearing on the SEC lawsuit is still ahead.