In the ongoing Binance SEC lawsuit, a significant development has emerged from the U.S. District Court for the District of Columbia. The latest order specifically addresses the allegations surrounding Binance’s tokens, BNB and BUSD, amidst the SEC’s accusations of violating securities laws.
Key Ruling in Binance SEC Legal Battle
The court has made it clear that it will allow the SEC’s claims related to Binance’s initial coin offering (ICO) of BNB and subsequent sales of BNB to proceed. The court’s decision states, “The portions of Count One against Binance relating to the initial coin offering of BNB and ongoing sales of BNB after the ICO are moving forward as per the Court’s June 28, 2024 Memorandum Opinion and Order.”
This latest ruling grants the SEC the authority to investigate Binance’s potential violation of securities regulations by failing to register BNB as a security. Furthermore, the court is also permitting the progression of other claims concerning BNB and the exchange’s operations as the legal battle unfolds.
The court specifically mentioned that “the claim against Binance in Count Three regarding BNB Vault” will proceed, in addition to claims against the exchange and its US-based affiliate, BAM Trading, for failing to register under the Securities Exchange Act. This ruling underscores the importance of Binance adhering to U.S. securities laws, especially in its interactions with American investors.
Exclusion of Claims Involving BUSD
However, the court did not greenlight the SEC’s claims related to BUSD, Binance’s stablecoin, at this stage. Count Two of the SEC’s complaint concerning BUSD was excluded from the discovery process.
The court specified that fact discovery “may NOT delve into the allegations in Count Two, pertaining to BUSD,” marking a partial win for Binance. The ruling also limited other claims, including those regarding Binance’s Employee Stock Token Options Plan, deeming them insufficient to proceed at this juncture.
The court’s order directly addressed the disagreements between the SEC and Binance regarding the scope of discovery. While the SEC pushed for broader discovery on claims not explicitly dismissed, the court pushed back against this approach.
As the Binance SEC lawsuit progresses, both Binance and the SEC must adhere to a scheduling order, with any further discovery disputes being referred to Magistrate Judge Zia M. Faruqui. The judge emphasized the importance of resolving issues through mutual cooperation before involving the court.