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The US Securities and Exchange Commission (SEC) lost its bid to classify sales of BNB, Binances native token, on secondary markets, and the Binance USD (BUSD) stablecoin as securities, according to a court filing signed by Judge Amy Berman Jackson on June 28.

The court referenced Judge Analisa Torres 2023 ruling in the SEC vs. Ripple Labs case to dismiss the secondary BNB sales claim. It stated that determining whether a secondary market sale is a sale of an investment contract depends on the totality of the circumstances and the economic reality of each specific transaction.

According to the filing, the SECs contention was based on the idea that if BNB was initially sold as an investment contract, any subsequent token sale would also be considered a sale of a security.

However, the court stated that this assertion does not hold, as it does not consider each secondary transactions specific details and context. In other words, just because BNB tokens were initially sold as investment contracts does not mean they remain securities throughout their lifecycle.

The court also highlighted inconsistencies in the SECs stance and noted that more facts are needed to plausibly allege an expectation of profits from secondary sales under the Howey test.

Scott Johnsson, Van Buren Capitals general partner, called the ruling a big loss for the SEC.

James MetaLawMan Murphy, a crypto-focused attorney, also celebrated the decision, calling it a win for the greater crypto industry.

The courts dismissal of the SECs argument about BNB secondary sales could influence other cases where crypto exchanges like Kraken and Coinbase are involved, as they face similar charges from the SEC for trading crypto assets considered unregistered securities.

While the court dismissed the SECs secondary market sales claim, it mostly sided with the SEC in its lawsuit against Binance.

As noted, the SEC can continue investigating Binances staking program, the sale of BNB tokens after their initial coin offering (ICO), and potential anti-fraud violations.

The court will also consider the SECs claims that Binances former CEO, Changpeng Zhao, significantly influenced Binance and that Binance should have registered as an exchange.

CZ is currently serving a separate sentence for violating money laundering laws.

The SEC vs. Binance lawsuit started in June last year when the securities regulator sued Binance and its founder, Changpeng Zhao, alleging that Binance was operating illegally in the US by offering the sale of unregistered securities.

About three months later, Binance filed a motion to dismiss the SEC lawsuit, arguing that the SEC had exceeded its legal authority.

Following the latest court order, the next court hearing is scheduled for July 9.

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SEC loses bid to classify BNB secondary sales as securities - Crypto Briefing