Federal Judge Orders Probe into Whether Cryptocurrencies Qualify as Securities
Date: 2024-01-19 Author: Dima Zakharov Categories: IN WORLD
In a pivotal moment in the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Binance, Federal Judge Amy Berman Jackson has issued an order for a thorough examination. The primary objective of this investigation is to ascertain whether cryptocurrencies can be categorized as securities and whether staking should be considered an investment contract.
The SEC filed a lawsuit against Binance, Binance.US, and former CEO Changpeng Zhao (CZ) in early June 2023. Notably, the regulator identified cryptocurrencies with a market capitalization exceeding $115 billion as potential securities.
The recent order states that both parties will have the opportunity to present their arguments. Judge Jackson intends to address several key issues, including whether the SEC correctly interprets the "Howey Test," whether regulatory litigation can be used as a tool to oversee the crypto industry, and whether cryptocurrencies fall under the definition of securities, both in primary and secondary markets. Additionally, the investigation will determine the status of staking and whether an investment contract should involve a contractual obligation between transaction participants.
The order specifies that only one attorney will represent the defense, with no scheduled date for the hearing as of the time of writing.
It's worth noting that in November 2023, Binance agreed to pay a $4.3 billion fine to resolve disputes with the U.S. Department of Justice, the U.S. Treasury, and the Commodity Futures Trading Commission. However, the SEC lawsuit remains pending and awaits its day in court.
