Coin Edition -
- District Judge Amy Jackson dismissed the SEC’s claim that secondary sales of BNB tokens qualify as securities.
- The ruling argued that the nature of tokens can change over time.
- Judge Jackson criticized the SEC’s lack of a comprehensive regulatory approach.
A federal judge has rejected the U.S. Securities and Exchange Commission’s claim that secondary market sales of Binance’s BNB token constitute securities, delivering a significant win for the cryptocurrency exchange and providing clarity on the regulatory status of digital assets.
Judge Amy Berman Jackson of the U.S. Court for the District of Columbia rejected the SEC’s arguments that secondary market transactions of Binance’s BNB token met the criteria for securities as defined by the Howey Test.
The decision aligns with Judge Analisa Torres’ opinion in the Ripple lawsuit, which emphasized the importance of the economic reality of token transactions when applying the Howey Test. In her ruling, Judge Jackson highlighted the SEC’s encroaching stance on crypto regulations and criticized the agency for not adopting a comprehensive approach specific to the industry.
Judge Jackson ruled that the nature of tokens can change over time. She rejected the notion that a token, once classified as a security, must always remain so. Judge Jackson contended that the Howey framework does not support the idea that an asset involved in an investment contract remains a “security” when traded by individuals across exchanges and used in various ways.
The judge believes this deviation leaves the court, the industry, and future buyers and sellers without a clear principle to differentiate between security tokens and non-security tokens. FOX correspondent Eleanor Terrett posted on X (formerly Twitter) about Judge Jackson’s position on the SEC’s approach to crypto regulation.