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SEC References Terraform Labs Ruling in Ongoing Cases Against Coinbase and Binance

The Recent SEC Determination

The US Securities and Exchange Commission (SEC) has referenced a recent ruling against Terraform Labs in their ongoing legal cases against Coinbase and Binance. On December 28, the SEC determined that Terraform Labs’ tokens UST and LUNA are securities and that Terraform Labs sold these securities without proper registration, violating Sections 5(a) and 5(c) of US securities law (source).

The Coinbase Case

In the Coinbase lawsuit, the SEC is using the precedent set by the Terraform case to argue that Coinbase also violated securities law by listing tokens potentially classifiable as securities (source).

The Binance Case

Similarly, in the Binance lawsuit, the SEC cited the similarity of Binance’s offerings, including the “so-called stablecoin” BUSD and services like BNB vault and Simple Earn, to those of Terraform Labs (source).

Concerns from Coinbase Investors

In 2023, Coinbase investors expressed concerns that the exchange’s listed tokens could be classified as securities by the SEC, potentially triggering additional regulatory obligations.

Binance’s Plan Regarding BUSD

Binance announced its plan to phase out support for the Binance USD (BUSD) stablecoin by 2024, beginning with delisting eight BUSD trading pairs and suspending isolated margin borrowing for them by early September (source).

No Comments Yet

At the time of the publication, neither Coinbase nor Binance provided comments regarding the SEC’s allegations.

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