SNEAK PEEK

• The government’s use of “reserve” in the Binance hearing raises transparency concerns.
• The lack of clarity surrounding token classification undermines the case’s transparency.
• Legal professionals question the SEC’s strategy and its compliance with the law.

In a recent hearing before Judge Jackson, Binance, one of the leading cryptocurrency exchanges, faced scrutiny over its legal proceedings. The hearing transcript has sparked a discussion among legal professionals and cryptocurrency enthusiasts. Notably, concerns were raised about the government’s use of the term “reserve” and the lack of clarity surrounding the classification of specific tokens.

Maybe I’ve got it wrong. But as I review the transcript of Binance’s hearing before Judge Jackson, since when does Rule 8 (or 11) allow any party, let alone the government, to “reserve” identifying what exactly it claims to “get past” a motion to dismiss and into discovery? 1/6

— paulgrewal.eth (@iampaulgrewal) June 25, 2023

Paul Grewal took to Twitter to express his bewilderment over the government’s approach in the hearing. He questioned the allowance of “reserving” the identification of specific claims during the motion to dismiss and discovery phases, citing Rule 8 or 11. Grewal further pointed out that such a tactic contradicts transparency and due process principles.

Moreover, the discussion intensified when the SEC counsel, representing the government, declined to categorize specific tokens traded on Binance. When asked by the judge if those tokens could be considered commodities, the SEC counsel responded by stating they were not taking a position then. Consequently, this ambiguity raised concerns about the SEC’s strategy and its impact on the case’s transparency.

On the other hand, Matt Feinberg, a legal expert, chimed in, suggesting that using the term “reserve” might not be the most straightforward choice of words. Feinberg encouraged focusing on the argument that sufficient notice had been provided in the pleading instead.

In response, another legal professional offered a different perspective, explaining that the use of “reserve” created the impression that the SEC hoped to find more evidence during discovery, implying a lack of confidence in their initial claims.

On the same note, Grewal commended the SEC counsel for their honesty, acknowledging that it accurately represented the situation. However, he argued that such an approach was not compliant with the law.

I actually applaud counsel for being honest— it accurately describes what is going on. But it also isn’t lawful.

— paulgrewal.eth (@iampaulgrewal) June 25, 2023

Nevertheless, the debate regarding transparency and legal strategy continued, with Grewal questioning how Rule 8 could tolerate withholding information about the specific tokens claimed as securities. He referenced a court case, emphasizing the importance of traceability in Section 11 cases.

• SEO Powered Content & PR Distribution. Get Amplified Today.
• PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
• PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
• PlatoESG. Automotive / EVs, Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
• BlockOffsets. Modernizing Environmental Offset Ownership. Access Here.
• Source: https://investorbites.com/binance-hearing-raises-concerns-about-transparency-and-legal-strategy/