Binance Wins Big as Court Tosses Most SEC Claims
Judge Tosses Most of SEC’s Binance Claims in Landmark Win
The U.S. District Court for the District of Columbia just handed Binance its biggest victory yet, dismissing the bulk of the SEC’s case and leaving only a narrow set of claims alive. The ruling slashes the agency’s attempt to brand nearly every token and service on the exchange as unregistered securities, signaling that broad enforcement tactics may face steeper judicial resistance going forward.
The SEC filed suit in June 2023, accusing Binance and its founder Changpeng Zhao of operating an unregistered exchange, offering unregistered securities, and misusing customer funds. The complaint targeted BNB, BUSD, and a laundry list of other tokens traded on the platform. Binance moved to dismiss, arguing that the SEC lacked authority over secondary-market trading of digital assets that were not investment contracts under the Howey test. Judge Amy Berman Jackson agreed with most of that argument.
She ruled that the SEC failed to show how secondary sales of tokens on Binance constituted investment contracts because the agency could not tie buyers’ profits to Binance’s or the issuers’ ongoing efforts. Only the agency’s claims involving BNB sales to U.S. persons and the unregistered exchange operation survived. The court also rejected the SEC’s attempt to treat Binance’s staking program as a security, finding no managerial efforts by the exchange that would satisfy Howey.
The decision narrows the SEC’s reach over secondary trading and forces the agency to prove a direct economic link between token buyers and issuers—an evidentiary bar the court found missing in most counts. Binance escapes liability on the majority of tokens listed in the complaint and gains breathing room for its U.S. operations while the surviving claims proceed to discovery.
The ruling chips away at the SEC’s claim of sweeping authority over crypto platforms, forcing the agency to litigate token-by-token rather than painting entire exchanges with one broad brush. Exchanges and DeFi protocols now see a clearer path to argue that secondary-market activity falls outside securities law, while traders face reduced threat of sudden delistings driven solely by SEC complaints. Stablecoins like BUSD receive indirect protection as the court declined to classify them as securities without specific proof of issuer control.
This decision raises the cost of SEC enforcement and lowers the probability of across-the-board platform shutdowns, yet it leaves open the risk that future cases built on stronger evidence of issuer-promoter links could still prevail.
