Binance vs SEC: Regulator Seeks to Capitalize on Terra Ruling

The year 2023 has ended, but the case involving the SEC and Binance is not yet over. As recently as yesterday, the U.S. crypto regulator filed a notice of supplemental authority, inviting the court to consider a decision made in the SEC vs. Terraform Labs lawsuit. Binance’s legal team has their work cut out for them once again.

The SEC Continues Its Assault Against Binance

So there will be no rest for Binance and its entire legal team? Even after paying out 4 billion dollars in fines, and reluctantly letting go of Changpeng Zhao (CZ), the world’s leading crypto exchange is still under constant pressure.

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SEC uses the Terra Labs case in a lawsuit against Binance

— Whale | Dinobet.io (@WhaleChart) January 4, 2024

As reported by CoinPaprika, the Securities and Exchange Commission filed a notice titled “Binance VS US SEC: Terra Lawsuit Decision As Supplement Authority” to the court on January 3rd. It includes a request for the court to consider the decision of the case against Terraform Labs in the SEC vs. Binance trial.

“The opinion is therefore relevant for the court’s review of BAM Trading Inc.’s and BAM Management US Holding Inc.’s motion to dismiss.,” the SEC states in the document.

In other words, the financial regulatory institution is inviting the court, like the one that ruled on the Terra case, to consider the definition of an “investment contract” in order to score a point against Binance’s defendants. For their part, the defendants intend to “dismiss decades of established law.” They also argue that an investment contract is neither a contract nor a transaction and even less a scheme.

Furthermore, the same court that dealt with the SEC vs. Terra case applied the “Howey Test”. This led to the cryptocurrencies UST, LUNA, wLuna, and MIR being classified as investment contracts, and consequently as “securities”.

In the case of Binance, this classification seems relevant for the BUSD stablecoin (already on its way out), the crypto associated with its staking service BNB Vault, and its Simple Earn program.