The Securities and Exchange Commission (SEC) has submitted a notice of supplemental authority to the court in the ongoing lawsuit against Binance. This action by the SEC points to the recent Terraform ruling, which classified UST, LUNA, wLUNA, and MIR as securities under the Howey test. The Terraform ruling is considered a significant precedent that bolsters the SEC’s case against Binance.
The Terraform ruling was made by Judge Alvin K. Hellerstein in the United States District Court for the Southern District of New York. This ruling stated that the four tokens in question met the criteria to be considered securities, as they were offered and sold as investment contracts with the expectation of profit derived from the efforts of others. The ruling relied on the Howey test, which is commonly used to determine whether a transaction qualifies as an investment contract and therefore, a security.
By citing this ruling in the Binance lawsuit, the SEC is seeking to strengthen its argument that Binance’s activities involve the sale of unregistered securities. Binance, one of the largest cryptocurrency exchanges in the world, has been under investigation by the SEC for allegedly allowing US users to trade securities without complying with the necessary regulations.
This development in the ongoing Binance lawsuit emphasizes the SEC’s determination to regulate the cryptocurrency industry and enforce securities laws. As more cases and rulings like the Terraform decision arise, it becomes clear that the SEC will not hesitate to take legal action against companies and individuals involved in potential securities violations. The outcome of this lawsuit against Binance could have significant implications for the regulatory landscape of the crypto market, setting a precedent for future cases and potentially shaping the way cryptocurrencies are classified and regulated.
