In the lawsuit between Binance, Binance.US, former CEO Changpeng ‘CZ’ Zhao and the U.S. Securities and Exchange Commission (SEC), the securities regulator has filed a notice of supplementary authority with the court. In connection with its lawsuit against Binance and its affiliates, the SEC ruled that UST and LUNA were securities, SEC v. It cited a recent ruling from Terraform Labs.
SEC v. SEC v. Terraform Labs’ decision was invoked. In the Terraform Labs case, the court applied the Howey Test and classified UST, LUNA, wLUNA, and MIR as investment contracts and as securities. This action highlights the SEC’s commitment to enforcing decades of established laws and preventing violations in the digital asset space.
Relevance to Binance
The court granted summary judgment to the SEC against Terraform Labs for violation of Section V of the Securities Act of 1933 and violation of regulatory exemptions by selling securities to U.S. investors. Now, the judges in the Binance lawsuit claim that Binance may be doing the same thing. This development reinforces the SEC’s statement that Binance’s actions constitute a securities offering regulated under U.S. law.