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Coinbase representatives appear to have made a historic move that could significantly impact the future of cryptocurrencies. Judge Amy Berman Jackson’s decision in the case between the Securities and Exchange Commission (SEC) and Binance played an important role in the step taken by the Coinbase team. In the application made by the exchange, it is stated that the BNB token, the native token of the Binance exchange, does not constitute a securities sale when considering the criteria listed in the Howey test, and Coinbase refers to this situation.
Coinbase and SEC Case
Through a published letter, Coinbase exchange expressed the view that the SEC arbitrarily created new rules without any basis. Officials stated that this situation was never consistently conveyed by the SEC and emphasized that the SEC tried to enforce it with retroactive actions.
On June 27, a critical decision was made, and Coinbase exchange filed a lawsuit against the SEC and the Federal Deposit Trust Corporation (FDIC). It was stated that these government agencies were trying to create a line between the cryptocurrency sector and the banking sector.
It should be noted that Ethereum is also at the core of the events. In 2018, SEC corporate finance director William Hinman had the view that Ethereum’s smart contract protocol was sufficiently decentralized and therefore not a security.
Is Binance Exchange and XRP Decision a Precedent?
Judge Jackson’s decision in the SEC v Binance case could play an important role in this process. Additionally, the decision previously made by Judge Analisa Torres in the SEC v Ripple Labs case, which stated that XRP‘s secondary sales did not represent unregistered securities sales, had also made a significant impact.
Considering these situations, it is seen that the decision supports the view that the mentioned assets do not parallel the SEC’s characterization of them as investment contracts.
