“Not a good day for Binance. The SEC’s got to sit back and let the Judge make its points for it – which is the best place to be in court,” he concluded.
Today, in a Washington courtroom, Binance, the world’s largest cryptocurrency exchange, faced off against the U.S. Securities and Exchange Commission (SEC).
The hearing was a pivotal moment in the ongoing debate over cryptocurrency regulation and it seems it didn’t go Binance’s way.
According to Jeremy Hogan, a crypto-friendly attorney from Orlando, Binance appears to be in hot water as even the Judge has been implicitly siding with the SEC.
“If you hold the BNB token 👎, well, you might want to take a good hard look at the “Sell” button!”, he warned.
“The SEC’s got to sit back and let the Judge make its points for it”
“The Judge is not buying into Binance’s Fair Notice Defense nor its Major Questions Doctrine argument, and she is being obvious about it,” he wrote on X. I appreciate Judges who are obvious they disagree with me. Then I know – I have two opponents!”
Hogan continued, “The Judge was very pointed – ‘The SEC isn’t specifically authorized to regulate ANY specific industry so per your argument…etc.’ She was not buying it at all […] The SEC’s enforcement authority is to pursue violations of the securities laws. If they file suit and the court finds the law was violated, by definition the SEC hasn’t exceeded their authority. If the court finds no violation, the SEC loses the case; no need for MQD (Major Questions Doctrine).
Insisting on the Judge’s unconvinced position on Binance’s MQD argument, Hogan added “she also seemed to think that an MQD argument requires an issue of major economic significance – something that would be detrimental to the entire American economy such that Congress needed to be involved.”
“Not a good day for Binance. The SEC’s got to sit back and let the Judge make its points for it – which is the best place to be in court,” he concluded.
Binance sought dismissal of the SEC’s lawsuit
Hogan’s commentary reflects a challenging day for Binance. In this high-profile hearing, Binance sought dismissal of the SEC’s lawsuit filed in June. The SEC accused Binance and its U.S. arm of various violations, including artificially inflating trading volumes, diverting customer funds, not restricting U.S. customers, and misleading investors about market surveillance controls. Moreover, the SEC charged Binance with facilitating trading of certain crypto tokens it deemed unregistered securities.
The outcome of this hearing is crucial. It could significantly impact how cryptocurrencies are regulated, shaping the SEC’s authority over the sector. Binance, while having settled cases with the Department of Justice and Commodity Futures Trading Commission, is resisting settlement with the SEC. This resistance stems from not wanting to concede that the tokens in question are securities, which could profoundly affect Binance’s business model.
The SEC’s lawsuit is part of a broader regulatory focus on crypto firms, shifting from companies selling digital tokens to those offering trading platforms and acting as broker-dealers. The SEC has been successful in cases against firms over token issuance but faced challenges in other high-profile cases, such as the one against Ripple.
