Binance and its founder Changpeng “CZ” Zhao applied to the District Court of Columbia to dismiss the lawsuit filed by the US Securities and Exchange Commission (SEC). Binance claims that the SEC’s complaint does not meet legal criteria. The company is critical of the SEC’s approach to treating commodity-traded tokens such as Bitcoin and Ether as investment contracts.
Howey Test Controversy and Binance’s Defense
Binance claimed in its complaint that the SEC failed to apply the Howey test. The Howey test is used to determine whether an asset is an investment contract. The company stated that the SEC did not provide sufficient evidence to support its claims that there was a separate investment agreement for each token. Additionally, SEC’s Bitcoin (BTC) $94,029.6 He stated that it did not create a framework to separate commodities such as Ether (ETH) from securities.
Ripple 
$2.2‘s General Counsel Stuart Alderoty criticized the SEC’s claims that cryptocurrencies have no inherent value. Binance also argued that the SEC failed to disclose the prosecution of third-party token developers. The company stated that it was unnecessary to target only ten of these tokens.
BinanceUS’ Claims and Legal Process
BinanceUS stated that the SEC could not prove the transactions occurring on its platform as investment contracts. The company stated that investors do not expect to make a profit from these transactions through the efforts of others. He also emphasized that the SEC’s token-based analysis is inadequate and does not provide a scheme to separate tokens into securities and other assets.
BinanceUS addressed SEC allegations based on its staking activities. The company stated that some parts of these claims lack legal basis. He argued that parts of the reasons for the SEC case should be rejected.
This move by Binance is considered an important step regarding regulations in cryptocurrency markets. The defense of the company is of great importance in terms of market regulation and cryptocurrency law. On the other hand, BNB price increased by 2% to $685.20 following these developments. Investors expect the token to reach $800 after CZ Zhao’s positive statements.
This case is expected to shape future legal regulations in cryptocurrency markets. Binance’s defense could trigger a significant debate in the market.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
