Binance Challenges SEC's Use of Ripple Case in Legal Battle

Binance, one of the largest cryptocurrency exchanges, is fighting against the Securities and Exchange Commission's (SEC) attempt to use a default judgment from a case involving Vahe as a precedent in their legal proceedings. 

The legal team representing Binance is questioning the SEC's broad classification of digital assets as securities, citing precedents set in the SEC cases against Ripple Labs and Life Partners. They argue against the reliance on a default judgment from the Coinbase insider trading case involving Vahe as it lacked contestation from the defendant and merely listed statutory arguments by the SEC.

In a joint response filed in court on March 8th, Binance, Binance.US, and co-founder Changpeng Zhao ("CZ") contested the SEC's reliance on the default judgment in the Vahe case. They emphasize that the judgment did not reference the SEC case against Ripple Labs, where the court rejected the SEC's claim that cryptocurrency token sales on secondary markets constitute "investment contracts."

The revival of the collective lawsuit against Binance and Changpeng Zhao raises concerns within the cryptocurrency community. Binance's legal team aims to reject the SEC's attempt to use the default judgment as they seek dismissal of the lawsuit.

Furthermore, the Second Circuit Court of Appeals reinstated a collective lawsuit against Binance and Changpeng Zhao. This decision could raise critical questions regarding the jurisdiction and territorial reach of U.S. securities laws, particularly concerning trading digital assets presumed to be securities.

This resurgence of legal battles comes at a time when clarity is sought regarding the trading of digital assets, potentially deemed securities, and its consequences following judgments like the one in the Vahe case.