The U.S. District Court for the District of Columbia has moved forward with most of the SEC's allegations against Binance Holdings Ltd. and its founder, Changpeng Zhao (CZ). The SEC's case focuses on unregistered crypto sales and fraudulent practices, though some charges related to Binance's stablecoin BUSD and secondary sales of BNB were dismissed.
The SEC's complaint targets Binance, CZ, and two affiliated U.S. entities, BAM Trading Services Inc. and BAM Management US Holdings Inc., for allegedly violating federal securities laws. The allegations include selling crypto assets without proper registration, operating unregistered crypto trading platforms, and making false statements to investors.
Specifically, the SEC claims that Binance and its affiliates improperly offered and sold five crypto assets and programs: BNB, BUSD, Binance’s Simple Earn, Binance’s BNB Vault, and BAM Trading’s Staking Program. According to the SEC, these were sold without following regulatory requirements meant to protect investors.
In response, Binance and its affiliates sought to dismiss these charges. The court's order allows most of the SEC's core claims, such as unregistered securities sales and fraud, to proceed. However, it dismisses some claims about BUSD and secondary sales of BNB. This means the case will focus on major aspects of Binance’s operations, but some specific issues won't be considered further.
This decision is a key moment in the SEC's scrutiny of the cryptocurrency industry. The outcome of this case could have far-reaching effects on Binance and the broader crypto market, potentially setting new standards for regulatory compliance and legal responsibilities for major crypto exchanges in the U.S. As the case develops, it will be closely watched by industry insiders and legal experts, given its potential impact on cryptocurrency regulation.
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