SEC Notice of Supplemental Authority
In the ongoing lawsuit involving Binance, Binance.US, former CEO Changpeng ‘CZ’ Zhao, and the U.S. Securities and Exchange Commission (SEC), the SEC has submitted a notice of supplemental authority to the court. This notice cites the recent ruling in SEC v. Terraform Labs as relevant to the case against Binance and its affiliates.
SEC’s Commitment to Enforcement
The SEC has cited the decision in SEC v. Terraform Labs to strengthen the definition of “investment contract” and prevent violations in the digital asset space. In the Terraform Labs case, the court applied the Howey Test to classify certain assets as securities. This action underscores the SEC’s commitment to enforcing decades-old settled law and preventing violations in the digital asset space.
Relevance to Binance
The court granted summary judgment to the SEC in Terraform Labs for violations of Section 5 of the Securities Act of 1933. Now, judges in Binance lawsuits claim Binance might be practicing the same things. This development strengthens the SEC’s statement that Binance’s actions constitute securities offerings subject to regulation under U.S. law.
Hot Take: Implications of SEC’s Rulings on Binance
The SEC’s use of the ruling in SEC v. Terraform Labs in its case against Binance has significant implications for the crypto market. It underscores the regulator’s commitment to enforcing existing securities laws in the digital asset space. This move could potentially lead to increased regulatory scrutiny of similar platforms and offerings, impacting the overall landscape of the cryptocurrency industry.
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