Deniz 
Using their lawsuits with the U.S. Securities and Exchange Commission, Coinbase and Ripple Labs hope to highlight a recent ruling that awarded Binance a victory on the handling of secondary sales of cryptocurrencies.
Coinbase and Ripple have highlighted over the past few days a lack of transparency on how crypto is controlled in files turned in in their respective cases.
“Binance further supports requiring the SEC to engage in rulemaking regarding digital assets,” Coinbase stated in a Tuesday court document. “As Coinbase has explained, rulemaking is required here because the SEC has adopted a novel and sweeping, yet still indeterminate, view of the securities laws—one that it has never coherently explained but is attempting to impose retroactively on the digital-asset industry using a scorched-earth enforcement campaign.”
This comes as Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia mainly rejected Binance’s attempt to dismiss its dispute with the SEC last week but did dismiss some of the SEC’s concerns, including that secondary transactions of BNB constituted securities.
Binance Ruling’s Impact on Crypto Regulation
Legal experts in the crypto sector praised the dismissal of the secondary sales accusation and said the judgment provided the general sense that rulings on crypto should be evaluated on a case-by-case basis, even if Judge Jackson decided to proceed with practically all of the SEC’s claims.
Coinbase noted in its third-circuit Court of Appeals brief that it “compounds the SEC-induced confusion for the industry,” according to Judge Jackson’s conclusion. Coinbase said the Binance opinion suggests the court should order the SEC to start rulemaking. The court is considering a lawsuit Coinbase filed in April 2023, in which the exchange is seeking an agency to respond with a yes or no answer to its petition for rulemaking in the cryptocurrency sector.
Using the Binance order in its complaint against the SEC for purportedly running as an unlicensed exchange, Coinbase filed similarly on Monday.
“This emphasizes the immediate need for appellate review to bring clarity to the application of the securities laws and the regulation of crypto market participants,” Coinbase wrote in the file.
Referring to Judge Jackson’s view that crypto does not fit “neatly” into the Howey ruling and that choosing to monitor the crypto sector case-by-case was “probably not an efficient way to proceed,” Ripple Labs also filed a “supplemental authority” on Tuesday.
Based on a 1946 U.S. Supreme Court judgment often cited by the SEC, Howey seeks to ascertain whether an asset qualifies as an investment contract and, thus, a security.
“This observation supports Ripple’s argument that providing clarity on the legality of the different types of sales of XRP was the most significant aspect of the Court’s summary judgment decision,” Ripple claimed in its filing.
Ongoing Legal Battles with the SEC: A Brief Overview
Years after the SEC said the company raised $1.3 billion via the sale of XRP, which it claims is an unregistered security, the SEC and Ripple have been fighting in court. Judge Analisa Torres of New York decided last year that a blind bid system in place for XRP allowed some of Ripple’s sales—called programmatic—not to violate securities laws. She did, however, mandate that other direct token sales to institutional investors be classified as securities.
Cases the SEC has filed against Coinbase, Ripple, and Binance are still pending. Against Binance, the agency plans a scheduling conference for July 9. Last year, the SEC sued Binance and its former CEO Changpeng Zhao, alleging that the cryptocurrency exchange misled consumers, neglected to limit U.S. investors from visiting Binance.com, misdirected funds controlled by Zhao, and operated as an unregistered exchange.
Zhao is spending jail time on Department of Justice charges right now.
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