Sep 22, 2023

Author Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena. Sep 22, 2023 11:36 Australian lawyer Bill Morgan has taken to Twitter to highlight a crucial excerpt from the SEC vs. Binance case, suggesting a potential challenge to the SEC’s regulatory action against Binance and other crypto platforms. Morgan’s tweet focuses on the defendants in the case, BAM Trading Services Inc. and BAM Management US Holdings Inc., and their reliance on a previous court ruling involving Ripple Labs Inc. He underscores the significance of the court’s stance on “blind/bid type transactions on secondary exchanges,” particularly in the context of digital asset trading on platforms like Binance. Extract referring to the Ripple case. The BAM defendants seek to rely on the finding of Judge Torres in respect of blind/bid type transactions on secondary exchanges. What if this Court on this motion accepts or does not critcise Judge Torres' decision on programmatic sales? /2 pic.twitter.com/5q33M4nHbn In simpler terms, this refers to transactions where buyers and sellers on platforms like Binance do not have a direct relationship, and the purchase of assets is not based on promises of future profit from the seller. Why Judge Torres’ Finding Matters: Morgan points out that in the SEC vs. Ripple Labs case, Judge Torres determined that ‘blind bid/ask transactions’ did not meet the definition of “investment contracts.” This decision could have far-reaching implications for the ongoing SEC vs. Binance case, where BAM Trading Services Inc. and BAM Management US Holdings Inc. are co-defendants. If the court upholds Judge Torres’ interpretation, the SEC may struggle to argue that Binance’s digital asset sales qualify as investment contracts. This potential shift could significantly impact the case’s landscape and limit the SEC’s ability to regulate these platforms as extensively as it desires. Key Arguments from the Defendants’ Memorandum : Binance’s defense team, in their Memorandum, has raised several noteworthy points: The SEC’s definition of an ‘investment contract’ is overly broad and flawed. Initial Coin Offering (ICO) cases should not be a universal standard for classifying digital assets as securities. The SEC’s application of the investment contract theory is too expansive, creating uncertainty for industry participants. The SEC has not adequately demonstrated that BAM’s staking service qualifies as an unregistered security. If the court embraces the defendants’ arguments and aligns with Judge Torres’ interpretation, the ruling could set a precedent that impacts Binance and other crypto platforms facing regulatory scrutiny. This could lead to a better understanding of digital assets and potentially curtail sweeping regulatory actions. Tags