Mango Marketplaces situation could bolster Binance’s defense towards SEC

Binance is strategizing to fortify its defenses against the US Securities and Trade Commission (SEC) by leveraging insights from an unanticipated source.

As of April 26, Binance and associates submitted a legal doc from an unrelated circumstance involving Mango Marketplaces exploiter Abraham Eisenberg, who was just lately uncovered guilty by a jury on April 18.

Unveiling the government’s stance

In a pivotal shift, Binance’s legal team scrutinized a certain phase in which the US govt outlined its stance on no matter whether USDC, a stablecoin, could be classified as a protection.

According to legal professional Damian Williams representing the governing administration, there is a clear assertion that “USDC lacks the vital properties of a protection,” citing that traders keeping USDC do not anticipate returns on their expenditure due to its direct backlink to the US dollar.

This standpoint closed a probable loophole that could protect against MGNO Perpetuals, tied to USDC’s benefit, from being classified as a combined swap.

When this argument supported the prosecution in the Eisenberg situation, it has implications that could aid defendants battling securities violations in other legal proceedings, which includes Binance.

Bearing the restrictions in thoughts

Nonetheless, the applicability of this situation is not all-encompassing. Irrespective of experiencing allegations of securities violations from the SEC, each and every case towards Binance pertains to distinctive choices.

What’s more, the latest filing completely pertains to the SEC’s civil lawsuit towards Binance Holdings Restricted, Changpeng Zhao, its previous CEO, and affiliated entities. It does not relate to a criminal circumstance where Zhao has admitted guilt and awaits sentencing.

The insights derived from the Eisenberg situation could also verify useful for defendants in other securities-related litigations, such as Coinbase, for similar factors. The SEC’s legal actions in opposition to Coinbase and Binance, initiated within just times of each individual other in June 2023, underscore the agency’s rigorous oversight above different exchanges, like Kraken, against which lawsuits had been pursued in November 2023.