Judge Rules BNB Sales Are Not Securities Binance Triumphs Over SEC

BeeNews reports:
A judge dismissed charges by the U.S. Securities and Exchange Commission (SEC), ruling that Binance’s BNB token and its cryptocurrency secondary sales are not securities.
District Court Judge Amy Berman Jackson in Washington, D.C., on July 2, stated that the regulator failed to demonstrate how secondary purchasers of BNB bought the token with profit expectations rather than utility.
Judge Jackson said, “The court finds that the SEC did not sufficiently allege that purchasers of BNB on the secondary market acquired them with an expectation of profits from the efforts of others, a key criterion under the Howey test.”
Previously, the SEC claimed 68 cryptocurrencies were securities. In June 2023, BNB and nine others faced lawsuits from the SEC against Binance and Coinbase for alleged securities violations.
Binance and its founder, Zhao, faced allegations of misappropriating billions in user funds by the SEC. The exchange was eventually charged with violating anti-money laundering laws and paid a $4.3 billion fine.
Judge Jackson’s latest ruling has been praised by Coinbase, emphasizing the importance of the Howey test in defining cryptocurrencies.
Just over a year ago, U.S. regulators sued Coinbase, accusing it of operating as an “unregistered securities exchange, broker, and clearing agency.”
Coinbase CEO Brian Armstrong countered the lawsuit, claiming the SEC was “misguided and intentionally obstructive” in providing clarity for the crypto industry.
Armstrong even hinted at Coinbase considering exiting the U.S. due to unclear regulations in the future. He said, “If we don’t see clear regulation in the U.S. in a few years, we may have to consider more investments in other parts of the world.”
In a recent filing to the U.S. Appeals Court, Coinbase strongly criticized the SEC, alleging the regulator’s actions were “seriously damaging” to digital assets.
Coinbase’s Chief Legal Officer vehemently criticized the SEC for “stifling” the industry.
Despite Binance’s victory over the SEC, BNB’s price remained in a loss this week, falling by 5% over the past five days.
Nevertheless, its price has surged over 120% this year, reaching a record high of $717.48 last month.


According to Forbes’ recent survey, CZ holds 64% of the BNB supply, totaling $56 billion, which constitutes a significant portion of his $61 billion net worth.
Forbes researchers spent months determining exactly how many billions Zhao owns. He holds 64% of the total supply, valued at $56 billion nominally. Authors: @eltrade and @Steven_Ehrlich https://t.co/NDynkmU7wH — Forbes Crypto (@ForbesCrypto) May 31, 2024
CZ is currently serving a four-month sentence in a low-security federal prison in California, while retaining 90% ownership of Binance.