Court transcripts from SEC v. Binance Holdings, Inc, et. al. have begun to appear, revealing that arguments central to the crypto space are now being actively discussed in U.S. courts.
U.S. District Judge Amy Berman Jackson presides over the case between Binance, the world’s largest cryptocurrency exchange, and the U.S. Securities and Exchange Commission (SEC), which is suing the exchange for extensive securities fraud violation.
The SEC accused Binance and its founder, Changpeng Zhao, of “weaving an extensive web of deception” through alleged market manipulation and deceit of regulators, shareholders, and customers.
Yesterday’s hearing revolved around the SEC seeking a temporary asset freeze and the repatriation of billions of dollars, asserting that investor funds are at risk.
SEC fields court’s questions
Judge Jackson is known for her meticulous handling of high-profile public corruption cases in recent years, including the prosecutions of long-time Donald Trump advisors Paul Manafort and Roger Stone.
Her questioning of both sides in the Binance case suggested skepticism towards each party’s arguments. She questioned the SEC’s approach of using an enforcement action instead of a rule-making process to set a national policy for regulating crypto assets.
In response, the SEC insisted on the validity of its approach, citing longstanding rules and the need to act when laws are violated. “Because this is the law, Your Honor,” replied Matthew Scarlato, counsel for the SEC, pointing to the existing Howey Test used to determine what constitutes a security.
In particular, Judge Jackson pushed against the SEC’s distinction between “crypto assets” and “crypto asset securities,” the latter of which the SEC contends meets the conditions outlined in the Howey Test. However, when pressed to answer whether that would make simple “crypto assets” commodities, the plaintiff demurred, saying, “We are not taking a position at this time.”
Binance under fire
Judge Jackson also push
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Author: Jacob Oliver
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