The court rejects some charges, but not all

Judge Amy Berman Jackson of the U.S. District Court allows the Securities and Exchange Commission’s (SEC) lawsuit against Binance to proceed.

However, Judge Jackson also dismissed some charges in the case.

The SEC accuses Binance of offering unregistered brokerage, trading and clearing services for digital asset securities in the United States

In its ruling, the court upheld the allegations related to Binance’s initial coin offering (ICO), ongoing sales for BNBBNB Vault and staking services, as well as allegations of failure to register and fraud.

But Jackson also granted Binance’s request to dismiss charges related to secondary sales of BNB and Simple Earn.

The decision underlined the evolving nature of tokens. Just because a token may have initially been considered part of an investment contract does not necessarily mean that it will retain that classification indefinitely.

Commenting on the ruling, Cody Carbone, policy director at Digital Chamber, highlighted the court’s clarification on the evolving nature of token classifications. He stressed the importance of distinguishing between tokens that function as securities and those that do not in today’s market.

The SEC’s approach to regulating cryptocurrencies has been the subject of debate, with Judge Jackson criticizing the agency’s evolving position and lack of a comprehensive, tailored regulatory framework for the cryptocurrency industry.

The US Department of the Treasury implements tax reporting requirements for cryptocurrencies

Meanwhile, the US Treasury Department has moved forward with long-awaited tax regulations affecting cryptocurrency transactions.

Under new rules finalized on June 28, cryptocurrency brokers, including exchanges and payment processors, are now required to report users’ sales and trades of digital assets to the Revenue Agency (IRS).

The move, part of the bipartisan, $1 trillion Infrastructure Investment and Jobs Act of 2021, aims to crack down on tax evasion in the cryptocurrency sector.

The rules are expected to take effect next year for the 2026 tax season. They are expected to align cryptocurrency tax reporting with existing requirements for traditional financial instruments such as stocks and bonds.

Treasury officials noted that adjustments have been made from the original proposal to ease burdens on brokers and phase in the requirements.

Lawrence Zlatkin, vice president of tax at Coinbasewelcomed the final rule on X and praised the IRS for developing more practical rules focused on custodial brokers like Coinbase. He highlighted improvements in implementation timelines and measures to prevent duplicative reporting.

However, Zlatkin expressed concern about the lack of a de minimis rule and the inclusion of non-financial transactions, arguing for rules comparable to those for traditional financial brokers.

The Treasury final rule also includes a provision that sets a $10,000 threshold for reporting transactions involving stablecoins.

The Supreme Court limits regulatory powers

In a separate development, the Supreme Court issued a landmark ruling reduction the executive branch’s authority to interpret the laws, significantly impacting the regulatory powers of federal agencies.

The decision, which upended the long-standing doctrine of “Chevron deference,” empowers the judiciary to more closely scrutinize the agencies’ actions in a variety of policy areas, including cryptocurrencies.

This signals a shift toward greater judicial oversight, giving courts more influence over the scope and interpretation of federal agency regulations.

In response to this legal backdrop, Coinbase Chief Legal Officer Paul Grewal reached out to X to highlight ongoing legal battles involving regulatory transparency.

Grewal criticized what he described as stonewalling tactics by the SEC aimed at hindering Coinbase’s efforts to obtain documents from SECTION Chairman Gary Gensler as part of their litigation.

Coinbase has requested documents related to Gensler’s communications, arguing they are essential to revealing potential due process violations in SEC enforcement actions.

This request stems from statements Gensler made in March 2021, in which he highlighted the SEC’s limited regulatory authority over digital asset exchanges, a position Coinbase believes is relevant to their case against the regulator.

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