Binance Vs SEC: Can Binance Class Action Open Door for Summary Judgment?
Highlights
- SEC files supplemental authority requesting the court to consider in the Williams v. Binance class action
- Appeals court reversed the dismissed class action against Binance for further proceedings
- Secondary sales of crypto tokens is likely to be argued by the SEC in other lawsuits
Binance Vs SEC: The U.S. Securities and Exchange Commission (SEC) is considering every legal and investigational development as supplemental authority to gain an upper hand in the lawsuit as Binance, Binance.US, and co-founder Changpeng “CZ” Zhao request the court to dismiss the case.
In the last action by the securities regulator SEC, a notice of supplemental authority is filed by the SEC claiming the relevance of the recently revived Williams v. Binance in this case.
SEC Vs Binance: New Supplemental Authority
According to a filing in the court, the SEC submitted a notice of supplemental authority requesting the court to consider in the Williams v. Binance class action in the crucial Binance Holdings lawsuit.
U.S. Court of Appeals for the Second Circuit reversed the dismissed class action against Binance and sent it back to the district court for further proceeding based on the opinion. Notably, the opinion mentioned only seven crypto tokens from various crypto mentioned in the actual lawsuit in 2020. These are ELF, EOS, FUN, ICX, OMG, QSP, and TRX.
Plaintiffs alleged that Binance sold these tokens without registration and hence the crypto exchange violated federal securities law and the “Blue Sky” securities laws of various states. The court concluded that transactions on the Binance exchange were domestic transactions on Amazon computer servers and held valid reasons for argument over the application of federal and state securities laws.
While the decision didn’t say the crypto tokens are securities, but the lawsuit tried to distinguish utility tokens from crypto tokens, claiming them as securities. Moreover, the lawsuit will try to gain clarity on whether secondary market trading of digital assets an “investment contracts”, as alleged by the U.S. SEC.
Binance Denies Coinbase Wahi Case Supplemental Authority
Binance has asked the court to reject the U.S. SEC’s notice of supplemental authority related to default judgment in Coinbase insider trading Wahi case. Defense attorneys said Judge Torres earlier rejected the SEC’s claim that blind sales of crypto tokens are “investment contracts”.
The attorneys also cited no opposition to the SEC’s motion by defendant Sameer Ramani, CFTC Commissioner Caroline Pham criticized the broader classification of digital assets as securities, and other legal precedents to justify its argument.
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