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Cryptocurrency News Articles
Binance SEC Lawsuit: Court Allows Claims Related to BNB Token, Dismisses BUSD Allegations
Oct 18, 2024 at 11:00 pm
In the latest development in the Binance SEC lawsuit, the U.S. District Court for the District of Columbia has issued a major order.
The latest development in the Binance SEC lawsuit sees the U.S. District Court for the District of Columbia issuing a major order. This order pertains to the claims related to the exchange’s tokens BNB and BUSD, following the SEC’s allegations of securities law violations.
Specifically, the court has allowed the SEC’s claims regarding the initial coin offering (ICO) of BNB and Binance’s ongoing sales of BNB after the ICO to proceed. However, the court has dismissed the SEC’s claims concerning BUSD, Binance’s stablecoin.
Here's a summary of the latest court order in the Binance SEC lawsuit.
Binance SEC Lawsuit: Court Allows Claims Related to BNB, Dismisses BUSD Claims
In the Binance SEC lawsuit, the court has clarified that it will allow the SEC’s claims regarding the crypto exchange’s native token, BNB, to proceed. These claims include the allegation that Binance failed to register BNB as a security, violating Section 5 of the Securities Act.
The court’s decision on this matter states, “The portions of Count One against Binance relating to the initial coin offering of BNB and Binance’s ongoing sales of BNB after the ICO are proceeding pursuant to the Court’s June 28, 2024 Memorandum Opinion and Order.”
This decision allows the SEC to continue its investigation into whether Binance violated securities regulations by failing to register BNB as a security. Additionally, the court is moving forward with other claims related to BNB and the exchange’s operation as the Binance SEC lawsuit progresses.
Furthermore, the court has also dismissed the SEC’s claims concerning BUSD, Binance’s stablecoin. Count Two of the SEC’s complaint in the Binance SEC lawsuit, which targeted BUSD, was excluded from discovery.
The court clarified that fact discovery “may NOT embark on the allegations in Count Two, concerning BUSD.” This decision marks a partial victory for the exchange in the ongoing legal battle.
Moreover, the court also limited other claims, such as those related to Binance’s Employee Stock Token Options Plan, as the allegations were deemed insufficient to proceed at this stage.
The court’s order notably addressed disagreements between the SEC and Binance regarding the scope of discovery. The SEC had pushed for broader discovery on claims not explicitly dismissed, but the court rebuked this approach.
“It was a waste of the Court’s time and resources to be forced to parse this sort of lawyer-like posturing,” the court stated.
The judge made it clear that the case’s discovery process should be managed efficiently, warning both parties to avoid unnecessary legal maneuvering.
As the Bianance SEC lawsuit moves forward, both Binance and the SEC will have to adhere to a scheduling order, and any further discovery disputes will be referred to Magistrate Judge Zia M. Faruqui. The judge emphasized that counsel should confer in good faith to resolve issues before escalating them to the court.
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