Why Is The SEC Suing Binance And The Implications For The Crypto Market
The US Securities and Exchange Commission (SEC) filed a lawsuit on Monday, June 5, against the world’s largest cryptocurrency exchange.
The SEC alleges that Binance sold unregistered securities in the US, has been misleading investors, and has failed to disclose important information about its business operations.
The SEC lawsuit consists of 136 pages. In this post, we’ll break it down into short and easy-to-understand chunks and we’ll discuss its implications for the crypto industry.
But to better understand the lawsuit, you first need to have a clear idea of what is the difference between a commodity and a security.
Commodities vs. securities
Commodities are defined as basic goods that can be bought and traded, such as gold, oil, or grain. They are natural and finite resources.
Securities, on the other hand, yield returns from a common enterprise, like a share in a company, or a government bond.
Commodities are considered stores of value because they have intrinsic value that they hold over time. Securities’ value, however, depends on the changing performance of the companies they represent.
