The lawyers representing Binance argued that a virtual asset can only be classified as a security if it is backed by a tangible contract. They maintained that the SEC has failed to provide any evidence proving that Binance tokens and services qualify as securities. Furthermore, they asserted that promoting assets should not be considered indicative of securities, as marketing is a common practice for businesses seeking to grow their market presence.
However, D.C. Judge Amy Berman Jackson disagreed with the lawyers, citing previous case law that allows for a broader interpretation of the securities issue. She expressed doubts about Binance’s interpretation of the Howey test, which is used to determine whether an investment qualifies as a security.
The judge also questioned SEC representatives regarding the criticism faced by the cryptocurrency community from the regulator. In response, the Commission reiterated their stance, stating that they regularly provide guidance to ensure compliance with US securities laws in the cryptocurrency market. They argued that Binance’s promotion of BNB and BUSD tokens had created unjustified expectations among customers who purchased these tokens.
In the meantime, cryptocurrency investors appear to be regaining their trust in Binance, despite the exchange recently promising to pay a substantial fine to US authorities.