In the latest development in the U.S. Securities and Exchange Commission (SEC) lawsuit against Binance, Binance.US, and former CEO Changpeng ‘CZ’ Zhao, the securities regulator filed the recent summary judgment in SEC v. Terraform Labs (finding that UST and LUNA were securities) as supplemental authority in their case against Binance.
Binance Vs US SEC: Terra Lawsuit Decision As Supplement Authority
Plaintiff U.S. Securities and Exchange Commission (SEC) has filed a notice of supplemental authority with the court, as per the latest filing with the court dated January 3. The SEC requests the court to consider ruling in SEC v. Terraform Labs in this case against defendants Binance, Binance.US, and CZ have similar arguments.
“The opinion is accordingly relevant to the court’s consideration of defendants BAM Trading Inc.’s and BAM Management US Holdings Inc.’s motion to dismiss, asserts the SEC in the filing. Also, the SEC claims the Terra ruling addresses the state to deny motions to dismiss the lawsuit.
The SEC claims that the court in Terra case addressed the definition of “investment contract” to reject the defendants’ efforts to “cast aside decades of settled law” and that an investment contract doesn’t mean a contract, transaction, or scheme.
In addition, the court applied ‘Howey Test‘ to rule UST, LUNA, wLUNA, and MIR as investment contracts, therefore, are securities. SEC said it is relevant for Binance’s stablecoin BUSD, staking service, BNB Vault, and simple earn program.
Furthermore, the court granted summary judgment to the SEC on its claim that defendants violated Section 5 of the Securities Act of 1933 and are not entitled to exemption under Regulation S due to selling securities to US investors.
In December, the SEC tried bringing supplemental authority from the Binance-DOJ guilty plea and settlement into the Binance lawsuit. Binance and CZ hit back at SEC for bringing irrelevant and impermissible aspects in completely distinct case.
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