- During the recent court hearing, the Binance lawyers criticized the SEC’s hypocritical stance on crypto regulations.
- The regulators apparently remained silent while the judge asked the SEC to define a security token.
- Paul Grewal states that the SEC was silent about Hinman’s test as if the question was never asked.
The Securities and Exchange Commission’s autocratic authority over the crypto space has been in question over the past years. In the recent Binance-SEC court hearing, Binance lawyers criticized the regulators’ hypocritical stance on crypto regulation.
As per reports, Judge Amy Berman Jackson, US District Court for the District of Columbia, ordered the SEC to define a security token, elaborating on the “boundary between a security token and a virtual currency. While the SEC argued that all digital assets come under the category of security, the judge asked, “How are the issuers supposed to know when they cross the line?”.
According to prominent crypto voices, including Paul Grewal and MetaLawman, the SEC deliberately remained silent on the matter. MetaLawMan pointed out that both in Coinbase and Binance hearings, the SEC “omitted” to mention Bill Hinman’s invention of the “sufficiently decentralized” test. Adding to the point, Coinbase’s Chief Legal Officer Paul Grewal stated that the SEC acted “as if the question wasn’t in fact asked.”
The hearing has been centered on the notion of security tokens, unveiling whether cryptocurrencies are securities and a matter under the scrutiny of the SEC. Arguing on the SEC’s ambiguous stance, Binance lawyers stated,
The SEC to this day has been talking out of both sides of its mouth when it comes to crypto tokens…They’re telling the industry (to) come in and register, while simultaneously with their other hand holding the door closed and preventing any viable path to do that.
The hearing followed Coinbase’s hearing over the SEC’s similar allegations against the exchange’s violation of securities laws. While the SEC alleges multiple firms including Binance and Coinbase, as violating the laws, the hearings are expected to bring a new turn in the space.
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