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Binance Faces Most of US SEC Crypto Lawsuit, Judge Rules | The powerful 790 KFGO
(Reuters) – A federal judge ruled on Friday that the bulk of a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance, the world’s largest cryptocurrency exchange, can proceed.
The decision by Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia is a blow to Binance, which had asked the court to dismiss the SEC’s lawsuit alleging that Binance and its founder and former CEO Changpeng Zhao violated securities laws.
The SEC’s lawsuit filed against Binance in June 2023 accused the exchange and Zhao of artificially inflating its trading volumes, diverting customer funds, failing to restrict U.S. customers’ access to its platform, and deceiving investors about its controls market surveillance.
The regulator also accused Binance of illegally facilitating the trading of several crypto tokens that the SEC considered to be unregistered securities.
The ruling deepens the exchange’s woes after Binance agreed to pay $4.3 billion in November to settle a lawsuit with the Department of Justice and the Commodity Futures Trading Commission over illicit finance violations.
However, Friday’s ruling marks a partial victory for the broader cryptocurrency industry as it sided with an earlier judge in saying that the SEC had not alleged that secondary sales of Binance tokens – sold by sellers other than Binance on exchanges – they were not titles.
(Reporting by Gnaneshwar Rajan in Bengaluru and Hannah Lang in Washington; Editing by Diane Craft)