Lawyer warns SEC legal actions possible for tether and binance coin

In giving his assessment of the top five cryptocurrencies, Attorney Jeremy Hogan, who has been covering the developments of Securities and Exchange Commission’s court battle with ripple labs, named Tether and Binance coin as ones which are at risk on the SEC danger rating.

Hogan, who has demonstrated his knowledge of the complex legal implications of the lawsuit filed by the regulatory commission against XRP’s mother company, warned that the two cryptocurrencies are likely to be candidates for legal action.

Ripple Labs has been alleged by the securities regulator of selling $1.3 billion of unregistered securities for eight long years. The legal proceedings started December last year and have taken quite interesting turns.

Conditions for SEC legal action

The Howey Test has been the means for the Securities and Exchange Commission to determine if there is a breach of securities law. The test evaluates whether a transaction qualifies as an investment contract or not.

“Under the Howey Test, an investment contract exists if there is an “investment of money in a common enterprise with reasonable expectation of profits to be derived from the efforts of others,” said Hogan.

The test is in reference to the SEC vs. W.J. Howey case that is preceded over by the Supreme Court back in 1946. The company sold zones of citrus groves to buyers in Florida who then leased back the land to Howey.

What Hogan says about Tether and Binance coin

Hogan talked briefly about Tether’s $18.5 million settlement last February with the New York Attorney General to end investigations of its alleged cover-up of an $850 million loss.

Meanwhile, as for Binance Coin, the lawyer pointed out that the cryptocurrency does form an “investment of money,” adding that the Binance ICO back in 2017 also falls under the description of an investment contract.


Image courtesy of Cointelegraph News/YouTube

Micky is a news site and does not provide trading, investing, or other financial advice. By using this website, you affirm that you have read and agree to abide by our Terms and Conditions.
Micky readers - you can get a 10% discount on trading fees on FTX and Binance when you sign up using the links above.