The recent legal decision by Judge Jackson had mixed outcomes for Binance, as the court granted a motion to dismiss charges related to secondary sales of Binance Coin (BNB) and Simple Earn. The decision emphasized that the classification of tokens is subject to change over time, and just because a token may have initially been considered part of an investment contract does not mean it retains that classification indefinitely.
Cody Carbone, chief policy officer at the Digital Chamber, pointed out the importance of distinguishing between tokens that function as securities and those that do not in today’s marketplace. Judge Jackson also criticized the SEC’s evolving stance on crypto regulation and the absence of a comprehensive regulatory framework tailored to the crypto industry.
The $1 trillion bipartisan 2021 Infrastructure Investment and Jobs Act includes provisions aimed at addressing tax evasion in the crypto space. These regulations are scheduled to phase in from next year for the 2026 tax season, with adjustments made from the original proposal to ease burdens on brokers and introduce the requirements gradually.
However, concerns have been raised over the absence of a de minimis rule and the inclusion of non-financial transactions, with calls for rules comparable to those for traditional financial brokers. The Treasury’s final rule sets a $10,000 threshold for reporting transactions involving stablecoins.
This decision also overturned the long-standing “Chevron deference” doctrine, giving the judiciary more influence over the interpretation of federal agency regulations across various policy domains, including crypto. In response to this legal backdrop, Coinbase’s chief legal officer, Paul Grewal, highlighted ongoing legal battles involving regulatory transparency.
Coinbase has requested documents related to SEC Chair Gensler’s communications, arguing that they are crucial to revealing potential due process violations in the SEC’s enforcement actions. This request stems from statements made by Gensler in March 2021, where he indicated the SEC’s limited regulatory authority over digital asset exchanges, a stance Coinbase believes is pertinent to their case against the regulator.
