The U.S Securities and Exchange Commission has filed a motion in federal court, urging a judge to deliberate a recent summary judgement in its ongoing against cryptocurrency exchange Binance.
In a January 3 filling in the U.S. District Court for the District of Columbia, the SEC pointed out analogies between a December 28 ruling in the commission’s case against Terraform Labs and its co-founder Do Kwon and the SEC’s enforcement action against Binance, Binance.US, and former CEO Changpeng Zhao.
In Terra case, Judge Red Rakoff predominantly sided with the SEC, determining that certain tokens implicated in the purported fraud were deemed securities due to being “investment contracts.” The judge also concluded that the “offers and sales of UST constituted an investment contract.”
“The court’s analysis of the Terraform defendants’ so-called ‘stablecoin’ UST is particularly relevant to this Court’s consideration of Defendants’ arguments concerning Binance’s so-called ‘stablecoin’ BUSD, and Defendants’ staking-as-a service, BNB Vault, and Simple Earn programs,” said the Jan. 3 filing.
The SEC argued that the judgement in the Terraform Labs case provides additional grounds for Judge Amy Jackson to potentially deny Binance’s motion to dismiss. Binance and Zhao had filed a motion to dismiss in September, arguing that the SEC had exceeded its authority and applied standards retroactively.
This SEC case is one of the final regulatory actions against Binance in the U.S., following a $4.3 billion settlement announced in December. As part of the settlement, Zhao agreed to plead guilty to one felony count, with sentencing scheduled for February.
The SEC’s actions against Terraform Labs and Binance in 2023, both alleging the offering of unregistered securities, are part of a broader series of lawsuits against major cryptocurrency platforms, including Coinbase, Ripple, Kraken, and others.