30s Summary

Binance, the cryptocurrency exchange, is under scrutiny by the US Securities and Exchange Commission (SEC) over certain digital coins. The SEC has targeted digital tokens like Axie Infinity Shards, known as AXS, Filecoin, Cosmos’ ATOM, The Sandbox’s SAND, and Decentraland’s MANA, alleging these were sold improperly. Binance’s lawyers have requested the case be dismissed, arguing these tokens are not securities but digital assets sold as part of investment deals. The dispute also involves a form of transaction known as “blind transactions.” The case has been ongoing since Jun 2023, with Binance CEO, CZ, serving prison time for related money laundering violations.

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Binance, the mega-popular cryptocurrency exchange, is currently dealing with the US financial watchdog because of some issues with certain digital coins. The lawyers defending Binance and its ex-boss, Changpeng “CZ” Zhao, have asked a court to chuck out the latest complaints raised by the US Securities and Exchange Commission.

This request came after the SEC filed a fresh lawsuit which also targeted other digital tokens like Axie Infinity Shards, known as AXS. Their lawsuit, updated in September, is also pointing fingers at other crypto tokens like Filecoin, Cosmos’ ATOM, The Sandbox’s SAND and Decentraland’s MANA.

Binance’s legal squad insists that the watchdog’s complaints are a fail because they tried to mix up crypto assets and investment contracts. The court, however, agrees with Binance’s stance that these digital assets can be sold as part of investment deals and that each transaction must stick to the securities law.

It seems the watchdog isn’t happy that the ruling doesn’t consider crypto assets as securities on their own. They are also pretty grumpy about the fact that reselling these assets on the market long after they were first sold by their creators isn’t classified as a securities transaction, too.

Binance’s legal team argues that the SEC’s latest claims against them should get thrown out because the argument doesn’t make sense legally.

So, what are blind transactions anyway? In simple terms, they are asset transfers that don’t provide full info about its contents. The SEC points out that Binance Holdings sold BNB in blind transactions on the Binance and Binance.US exchanges to buyers who didn’t know they were purchasing tokens from BHL.

This SEC vs Binance tussle has been going on for more than a year after the watchdog first filed a lawsuit against Binance in June 2023. Not to mention, Binance’s founder, CZ, recently served four months in a US federal prison in late September relating to some charges about breaking US Anti-Money Laundering laws.