The SEC has recently filed petitions in the cases against Coinbase and Binance, urging the courts to consider a recent ruling regarding Terraform Labs.
Specifically, the agency has stated that Binance’s BUSD should be classified as a security, following a similar reasoning to what happened with UST in the case of Terraform Labs. Let’s see all the details below.
The SEC cites a key ruling by Terraform Labs in the lawsuits against Coinbase and Binance
As anticipated, the Securities and Exchange Commission (SEC) intends to capitalize on a partial victory obtained in court against Terraform Labs, using it in separate proceedings against the two main cryptocurrency exchange platforms, Binance and Coinbase.
In a document filed on Thursday regarding the case against Coinbase, the agency presented the judgment of the Terraform Labs court in the Southern District of New York.
This sentence has granted a summary judgment on the claim that UST, LUNA, wLUNA, and MIR tokens are considered securities.
The SEC has cited this decision as a key support for its opposition to Coinbase’s motion for judgment in its favor. The document has been filed with the aim of further strengthening the SEC’s position against Coinbase’s motion.
In its opposition, the SEC lawyer emphasized that cryptocurrency issuers, including Coinbase, have implicitly encouraged investors to expect an increase in the value of the assets.
This is based on the widespread plan of broadcasters to develop and maintain value through a secondary market for resale.
It is important to note that the tokens UST, LUNA, wLUNA, and MIR, although not included in the SEC’s complaint against Coinbase, have been mentioned as examples of securities in the context of the Terraform Labs ruling.
On the contrary, the SEC’s complaint against Coinbase focuses on a different set of tokens, including SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO, which the SEC argues should be considered unregistered securities.
The new developments in legal processes
As already mentioned, even in the dispute with Binance, the SEC is trying to use the Terraform Labs ruling as a supporting argument.
In a document filed on Wednesday, the agency requested a Washington court to consider the Terraform ruling while evaluating Binance’s motions to dismiss the case.
The document states that the court’s analysis of Terraform’s ‘stablecoin’ UST is relevant to examine the defendants’ arguments regarding BUSD, stalking-as-a-service, and programs like BNB Vault and Binance’s Simple Earn.
The SEC emphasizes that Terraform Labs has previously used arguments similar to those of Binance, trying to separate the sale of tokens from the development and promotion of the Anchor protocol.
Protocol in which tokens can be staked to generate profit. The SEC argues that the situation is similar to that of Binance, which offers BUSD along with staking services, BNB Vault, and Simple Earn.
The agency writes that this provides further reasons to reject the motions for dismissal filed by the defendants.
In November, Binance and former CEO Chanpeng Zhao agreed to a settlement with the Department of Justice, pleading guilty to violations of the Bank Secrecy Act and other charges.
The SEC’s case against Binance for alleged operation of an unregistered securities exchange is still ongoing.
Specifically, the agency claims that Binance lied to customers and directed funds incorrectly towards an investment fund owned by Zhao. Over the past seven months, Binance has repeatedly tried to dismiss the case.
Justin Sun transfers millions in USDT to Binance
The founder of Tron (TRX), Justin Sun, reportedly made a transfer of millions of dollars in USDT, a stablecoin tied to the US dollar, to Binance in a context of weakness in the cryptocurrency market.
According to the on-chain data provider, Lookonchain, an address suspected to belong to Justin Sun recently deposited 50 million USDT on Binance.
In the previous month, the address withdrew a total of 439.5 million USDT, of which 371 million were deposited on the Binance cryptocurrency exchange platform.
The reason for this operation remains shrouded in mystery, giving room for various speculations.
Some speculate that Sun may have sold his USDT in anticipation of a market downturn, thus preparing to accumulate other cryptocurrencies at more favorable prices.
The timing of these transfers coincides with a general decline in the cryptocurrency market, which has seen a decrease of 1.05% in total market capitalization, amounting to approximately $1.73 trillion.
In addition, BTC has recorded a decrease of 1.63%, trading at $44,794 in the last 24 hours.
Many other cryptocurrencies have suffered losses, with Solana (SOL) leading the way with a 10% decrease, followed by Avalanche with a daily loss of 9%.
It is suggested that this sale could be supported by investors who will make profits, especially in anticipation of the expected approval of the spot-based ETF in the United States.
Despite the recent drop, in fact, Bitcoin initially showed an increase of almost 6% in the first days of January, defying the negative tone of global markets.