SEC Wins Partial Victory Against Binance, Preserves Core Securities Claims
SEC Wins Early Round Against Binance
U.S. District Judge Amy Berman Jackson handed the Securities and Exchange Commission a partial victory today, refusing to toss the agency’s sweeping enforcement action against Binance and its U.S. arm, Binance.US. The ruling keeps alive claims that the global exchange sold unregistered securities and operated without proper registration, while narrowing other counts and leaving the exchange’s deeper constitutional challenges for another day.
The case began when the SEC filed a thirteen-count complaint last summer, alleging that Binance’s token sales, staking programs, and wallet services amounted to unregistered securities offerings. Binance moved to dismiss nearly every claim, arguing that the tokens at issue were not securities, that staking rewards were not investment contracts, and that the SEC lacked authority over foreign platforms serving U.S. users. Judge Jackson’s 107-page opinion granted the motion in part and denied it in part, preserving the core allegations while rejecting some of the agency’s more aggressive theories.
The court held that the SEC had plausibly alleged that BNB and other listed tokens functioned as investment contracts under the Howey test because purchasers reasonably expected profits derived from Binance’s efforts. It also allowed claims that Binance operated as an unregistered exchange, broker, and clearing agency to survive, and it refused to dismiss the charge that Binance.US misled investors about its controls and reserves. However, the judge tossed the SEC’s attempt to treat every token trade as a securities transaction and declined to let the agency pursue certain aiding-and-abetting counts at this stage.
In plain terms, the decision means the SEC can keep pressing its central theory that major tokens and exchange services require registration, but it cannot stretch that theory to every transaction or foreign user. Binance must now decide whether to settle or continue fighting through discovery and trial, knowing the judge has already accepted the agency’s view that many digital assets can be securities when sold with profit expectations.
The ruling tilts authority toward the SEC on classification questions and signals that exchanges cannot simply relocate servers or entities to escape U.S. jurisdiction when U.S. customers are targeted. It raises fresh compliance costs for both centralized platforms and DeFi protocols that offer similar staking or token-launch services, while leaving stablecoin treatment and secondary-market trading rules for future cases.
Traders should treat this as a yellow light: the legal risk of holding or trading tokens still tied to an active exchange’s promotional efforts has increased, but the opinion stops short of declaring an industry-wide enforcement wave.
