Former SEC official: The burden of proof always lies with the SEC to prove that a product is a security

Odaily News In response to a recent U.S. judges dismissal of the SECs allegations regarding Binances BNB secondary sales and Simple Earn, John Reed Stark, former director of the U.S. SECs Office of Internet Enforcement, posted on the X platform that the burden of proof is always on the SEC to prove that a product is a security. He pointed out that the judge only asked the SEC to prove that people who bought Binance products were investors who bought Binance products because they hoped that prices would rise, rather than customers who bought Binance products because the products provided some kind of utility (such as trading discounts). According to the judge, if a digital asset security is somehow transformed into a utility tool rather than an investment speculation tool, then it is no longer a security. It is worth noting that the judge explicitly rejected the puzzling finding in the Ripple ruling that in the secondary market, there must be some kind of contractual relationship between investors and issuers to trigger the registration requirement, a conclusion that has never been adopted or even cited in any form by other regional courts. Considering Binances main business line, I dont think this decision is any good for Binance, any positive impact on the digital asset industry, or any good for digital asset investors.