The US Securities and Exchange Commission (SEC) has recently filed a notice of supplemental authority in its lawsuit against Binance, Binance.US, and former CEO Changpeng ‘CZ’ Zhao. The SEC is citing the judgment in SEC v. Terraform Labs as a significant precedent in its case. This strategic move is aimed at leveraging the Terra ruling to strengthen the SEC’s position.
However, Bill Morgan, a legal expert known for his pro-crypto stance, has argued that the Terraform Labs decision may not be directly relevant to the SEC’s case against Binance and Coinbase. Dave Weisberger, co-CEO of CoinRoutes, also commented on the Terra case, stating that its key focus was on the marketing of UST, LUNA, and yield through Anchor Protocol by Do Kwon, co-founder and former CEO of Terraform Labs. Weisberger emphasized that the case revolved around defining an investment contract rather than the tokens themselves.
Morgan agrees with Weisberger’s assessment, suggesting that the Terraform Labs case’s application of the Howey test may be as singular and standalone as the Torres decision on Ripple’s sale of XRP. He believes that the Terra ruling may have limited relevance and persuasive value in the context of the Coinbase and Binance lawsuits. Morgan also emphasizes that legal cases often turn on their specific facts, particularly when key legal issues are sensitive to specific circumstances.
The SEC’s argument centers around the Terra case’s interpretation of the “investment contract” definition within cryptocurrency offerings. The SEC contends that the Howey Test’s application by the court to classify UST, LUNA, wLUNA, and MIR as investment contracts and securities is directly relevant to the products and services offered by Binance. This includes BUSD (Binance USD), the staking service BNB Vault, and the Simple Earn program. The SEC believes that the Terra ruling should influence the court’s decision on Binance’s dismissal motion, highlighting the relevance to defendants BAM Trading Inc. and BAM Management US Holdings Inc.
In contrast to the SEC’s position, Bill Morgan’s analysis challenges the notion that the Terra ruling directly applies to the SEC’s case against Binance and Coinbase. Morgan argues against the SEC’s attempt to extend the ruling’s reach to digital assets and services offered by the exchanges, maintaining that the tokens and services fall outside the purview of securities law. His perspective questions the SEC’s approach and highlights the need to carefully examine the specific facts and legal issues involved in each case.
As the legal proceedings between the SEC and two of the most important crypto exchanges in the world unfold, the court will need to carefully consider the facts and legal arguments presented by both sides to determine the applicability and persuasive value of the Terra ruling.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Dave Weisberger, Bill Morgan, Changpeng ‘CZ’ Zhao, Do Kwon |
| Companies | Coinbase, Binance, BAM Trading Inc., US Securities and Exchange Commission, Terraform Labs, BAM Management US Holdings Inc., Bitcoinist, Binance.US, CoinRoutes |
| Currencies | Mirror Protocol, XRP, Terra Luna Classic, US Dollar, ust, wluna |
| Securities | None |
