Binance Responds to SEC’s Terra Supplemental Authority
In response to the U.S. SEC’s notice of supplemental authority in the ongoing lawsuit, Binance, Binance.US, and co-founder Changpeng “CZ” Zhao have filed a joint response denying the relevance of the Terra lawsuit’s summary judgment and findings. They argue that the SEC is distorting the Terraform lawsuits to make implausible arguments.
SEC’s Notice of Supplemental Authority
The SEC pointed out orders in the Terraform lawsuit where parties violated securities laws and stated that digital assets mentioned are securities under the Howey Test.
Defendants’ Rebuttal
The filing states that the SEC’s arguments about Terraform II do not support its claims in this case. It also argues that even if the SEC’s position were valid in other circuits, binding precedent in this circuit requires a test that can distinguish securities from non-securities based on “post-purchase commitments.”
Binance contends that the court’s interpretation of the Howey Test in the Terra lawsuit is incorrect. They claim that splitting an investment transaction across multiple contracts still constitutes an investment contract.
Furthermore, Binance and Binance.US argue that the SEC’s claim that BUSD is a security is irrelevant, as it contradicts the CFTC’s view that BUSD is a commodity.
Staking Service and Regulation S
The defendants assert that their staking service does not promise any payments but offers access to third parties’ blockchain consensus validation mechanisms. They also argue that discussions of Regulation S in the Terraform lawsuit have no bearing on this case as it only provides a regulatory safe harbor and does not determine the extraterritorial reach of securities laws.
Hot Take: Binance Fights Back Against SEC’s Terra Lawsuit Claims
Binance and its co-founder CZ are pushing back against the SEC’s attempt to use the Terra lawsuit as evidence in their ongoing legal battle. They argue that the SEC is misrepresenting the Terraform lawsuits and that the court’s interpretation of the Howey Test is flawed. The defendants also highlight the inconsistency between the SEC’s claim that BUSD is a security and the CFTC’s classification of BUSD as a commodity. Binance maintains that their staking service does not involve securities, and discussions of Regulation S in the Terra lawsuit are irrelevant to this case. The battle between Binance and the SEC continues as both sides present their arguments.
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