The lawsuit saga between the US Securities and Exchange Commission (SEC) and Binance takes an intriguing twist as the SEC references the SEC v. Terraform Labs judgment as a crucial precedent. However, legal experts debate its relevance to the ongoing case involving Binance, Binance.US, and former CEO Changpeng Zhao.
SEC's Strategy and Expert Views
The SEC's move aims to leverage the Terra ruling in their case against Binance entities and CZ Zhao. Notably, legal expert Bill Morgan, a pro-crypto figure, questions the Terraform Labs decision's direct relevance to the SEC's cases against Binance and Coinbase.
Terra Ruling's Focus and Interpretation
Dave Weisberger, CoinRoutes co-CEO, highlights the Terra case's focus on defining an investment contract, particularly regarding tokens like UST, LUNA, and yield through Anchor Protocol. This perspective is crucial to understanding the SEC's argument and potential impact.
Morgan aligns with Weisberger, suggesting that the Terra ruling's application of the Howey test may be unique, similar to the Torres decision on Ripple's XRP sale. He implies limited relevance and persuasive value in the context of Coinbase and Binance lawsuits.
SEC's Argument and Counterpoints
The SEC argues that the Terra case's classification of tokens as investment contracts directly applies to Binance's offerings like BUSD, BNB Vault, and Simple Earn. However, Morgan challenges this extension to digital assets, asserting they fall outside securities law.
Ongoing Legal Complexity
The unfolding legal battle prompts close examination of specific facts and legal arguments presented by both sides. The court faces the task of discerning the Terra ruling's applicability and persuasive weight in the SEC's lawsuits against major crypto exchanges.