The U.S. Securities and Exchange Commission (SEC) has lost an attempt to sell BNB, Binance's native token, on the secondary market and classify the Binance USD stub coin (BUSD) as a security, according to court documents signed by Judge Amy Berman Jackson on June 28.
The court cited Judge Analisa Torres' 2023 decision in SEC v. #Ripple Labs and dismissed BNB's secondary market claim. The court stated that determining whether a secondary market sale is a sale of an investment contract depends on the totality of the circumstances and the economic reality of each particular transaction.
According to the statement, the SEC's argument is based on the idea that if #BNB was initially sold as an investment contract, then subsequent #token sales would also be considered securities sales.
However, the court said that this argument fails because it does not take into account the specific details and context of each secondary transaction. In other words, the fact that a BNB token is initially sold as an investment contract does not necessarily mean that it remains a security throughout its life cycle.
The court also emphasized the inconsistency of the SEC's position, noting that more facts are needed to conclusively demonstrate an expectation of profit from a secondary sale under the Howey test.
Read us at: Compass Investments