In Friday’s ruling by the U.S. District Court for the District of Columbia on the case brought by the U.S. Securities and Exchange Commission (SEC) against Binance and its affiliates, the court dismissed several portions of the lawsuit, including some related to Binance coin (BNB) and stablecoin Binance USD (BUSD).

While the claims against Binance relating to the initial coin offering (ICO) of BNB and the cryptocurrency exchange’s ongoing sales of BNB after the ICO will move forward, the court ruled:

The portion concerning secondary sales of BNB, by sellers other than Binance, is dismissed.

The court explained that the SEC’s allegations were insufficient to demonstrate that these secondary sales qualified as unregistered securities offerings under the Securities Act.

The court also provided clarification regarding the sale of stablecoin BUSD. The SEC alleges that “Binance violated Sections 5(a) and 5(c) of the Securities Act by offering and selling BUSD without a registration statement.”

However, the court determined that Binance’s offering and sale of the stablecoin BUSD did not meet the criteria of an investment contract under the Howey test and is therefore not considered a security. Consequently, the court dismissed the claim related to BUSD. The court document states:

The claim against Binance concerning sales of BUSD is dismissed.

The Binance case has been compared to the SEC v. Ripple case. In July 2023, District Judge Analisa Torres ruled that Ripple’s programmatic XRP sales were not investment contracts, while institutional XRP sales were.

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