The US Securities and Exchange Commission (SEC) has referenced the recent ruling on Terraform Labs to support its claim that Coinbase and Binance violated securities law. In a ruling on December 28th, the SEC declared that Terraform Labs’ tokens, UST and LUNA, should be classified as securities. The SEC stated that Terraform Labs offered and sold these tokens without proper registration, which is a violation of Sections 5(a) and 5(c) of US Securities law.
In regards to the ongoing legal battles between the SEC and Coinbase as well as Binance, the SEC is utilizing the same argument it used in the Terraform Labs case. In a recent filing related to the Coinbase lawsuit, the SEC mentioned that the Terraform Labs case is relevant and that Binance’s case is similar, specifically pointing to Binance’s “so-called stablecoin” BUSD and its staking-as-a-service, BNB vault, and Simple Earns programs.
Last year, Coinbase faced scrutiny from the SEC as the regulatory body increased its scrutiny of the cryptocurrency industry. There were concerns among Coinbase investors that tokens listed on the exchange would be considered securities under SEC rules, leading to additional regulatory requirements.
Binance’s Actions in Response
In October, Binance announced its plan to delist eight Binance USD (BUSD) trading pairs as part of a broader strategy to phase out support for the stablecoin by 2024. The delisting includes pairs like AMB/BUSD, DASH/BUSD, FIDA/BUSD, HARD/BUSD, HOT/BUSD, IOST/BTC, NULS/BUSD, PORTO/BUSD, and REQ/BUSD for isolated margin borrowing.
Furthermore, Binance recently issued a warning that it may delist ten prominent privacy coins, such as Monero, Zcash, and Horizen, due to regulatory concerns. The exchange stated that these tokens have received a “monitoring tag” and may not meet the listing requirements related to team commitment, network security, trading volume, and other factors.
Both Coinbase and Binance were not available for comment at the time of publication.
