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

According to recent news that a US judge rejected the SEC's allegations against Binance BNB secondary sales and Simple Earn, John Reed Stark, former director of the SEC's Internet Enforcement Office, posted on X platform that the burden of proof always lies with the SEC to prove that a product is a security. He pointed out that the judge only required the SEC to prove that the people who bought Binance products were "investors" and that they bought Binance products because they hoped the price would rise, not "customers" who bought Binance products because the product provided some practicality (such as trading discounts). According to the judge, if digital asset securities are transformed into a practical tool in some way rather than an investment speculation tool, then it is "no longer a security". It is worth noting that the judge explicitly rejected the confusing finding in the Ripple ruling that there must be some contractual relationship between investors and issuers in the secondary market to trigger registration requirements, which is a conclusion that has never been adopted or even cited in any form by other courts in other regions. Considering Binance's main business line, it is not believed that this decision will benefit Binance, have a positive impact on the digital asset industry, or benefit digital asset investors.