According to a report, Binance has criticized the SEC’s inconsistent position on regulating cryptocurrency, accusing them of hypocrisy. The Securities and Exchange Commission suspect that Binance’s international trading may be in violation of federal securities law.
- At the recent court hearing, Binance’s legal team criticized the SEC for their inconsistent approach towards regulating cryptocurrencies.
- Interestingly, the regulators did not respond when the judge requested the SEC to clarify their definition of a security token.
- According to Paul Grewal, the SEC’s silence on the Hinman test gives the impression that they never even considered the question.
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The autocratic control of the crypto industry by the Securities and Exchange Commission has been under scrutiny in recent years. During the Binance-SEC court hearing, Binance’s legal team denounced the regulators’ inconsistent approach towards regulating cryptocurrencies.
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Judge Amy Berman Jackson of the US District Court for the District of Columbia has directed the SEC to clearly outline the characteristics of a security token, clarifying the distinction between a security token and a virtual currency. The SEC maintains that all digital assets fall under the definition of a security, but the judge questioned how issuers are expected to determine when they have crossed that line, according to reports.
Prominent figures in the cryptocurrency community, such as Paul Grewal and MetaLawman, have accused the SEC of deliberately withholding information. MetaLawMan highlighted that during the hearings for Coinbase and Binance, the SEC failed to mention Bill Hinman’s creation of the “sufficiently decentralized” standard. Additionally, Paul Grewal, Chief Legal Officer of Coinbase, stated that the SEC behaved as if they were not asked about the matter at all.
The situation is actually worse than that. They ignored the question about Mr. Hinman when asked directly, as if the question had not been asked at all.
The scheduled court hearing has focused on the topic of security tokens, with the aim of determining if cryptocurrencies can be classified as securities and fall under the jurisdiction of the SEC. In response to the SEC’s unclear position, lawyers representing Binance presented their arguments.
The Securities and Exchange Commission (SEC) has been sending mixed messages regarding crypto tokens. On one hand, they encourage the industry to register but on the other hand, they are actively hindering any feasible means of doing so by keeping the door closed.
The court session came after Coinbase’s hearing regarding the SEC’s accusations against the exchange for violating securities laws. Among the firms accused by the SEC, such as Binance and Coinbase, the hearings are anticipated to bring a new perspective to the industry.
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