Majority of US SEC’s crypto lawsuit against Binance to proceed
The judicial decision compounds Binance’s challenges following its $4.3 billion settlement with the US Department of Justice and the Commodity Futures Trading Commission over financial misconduct.
In a decision issued on 28 June 2024, a US federal judge authorised most of the US Securities and Exchange Commission (SEC) lawsuit against leading cryptocurrency exchange Binance. The origin of the lawsuit can be traced back to June 2023, when the SEC alleged that Binance and its CEO, Zhao, had manipulated the market, misused customer funds, non-complied with US customer restrictions, and misrepresented investors on their market surveillance controls.
Binance was also accused of enabling trades of crypto tokens, which were classified as unregistered securities by the SEC. For Binance, this ruling compounds its challenges following its recent $4.2 billion settlement with the Department of Justice and the Commodity Futures Trading Commission over financial misconduct.
However, the verdict partially favours the cryptocurrency industry as the judge invoked a previous ruling, stating that the SEC failed to prove that secondary sales of Binance’s tokens (those sold by sellers other than Binance on exchanges) should be classified as securities.
Why does this matter?
The following case reflects a broader regulatory trend directed to major crypto firms, such as Coinbase, Kraken, and Consensys, in an attempt to increase oversight of the cryptocurrency sector.
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