Lawyers representing cryptocurrency exchange Binance in a lawsuit brought by the United States Securities and Exchange Commission called on a judge to dismiss the case after arguing whether specific tokens qualified as securities.

In a Jan. 22 hearing in U.S. District Court for the District of Columbia, Binance’s legal team presented arguments on how the SEC treated cryptocurrencies under current regulatory and legal frameworks. According to a Reuters report, a Binance lawyer said the SEC was taking a contradictory approach to crypto firms, “telling the industry [to] come in and register, while simultaneously with their other hand holding the door closed and preventing any viable path to do that.”

Reports from the courtroom suggested the SEC said the Howey test for securities was “clear” for all assets, including crypto, and regulators were not obligated to warn firms that they could be violating securities laws. Judge Amy Berman Jackson reportedly said she would take the SEC’s and Binance’s arguments under advisement.

“It seems like you are trying to say that all digital assets, at the end of the day, have the earmark of securities,” Judge Jackson reportedly said to the SEC’s legal team. “If you are not, where is the boundary of what you are saying?”

The SEC v. Binance case could have significant implications for crypto firms operating in the United States. Many companies have claimed authorities do not offer a clear regulatory framework for legally operating, leading to enforcement actions against major firms, including Binance, Coinbase, Ripple and Kraken.

Binance, Binance.US and former Binance CEO Changpeng Zhao announced a settlement with the U.S. Justice Department, Treasury Department, and Commodity Futures Trading Commission in November 2023 for $4.3 billion. Zhao pleaded guilty to one felony charge as part of the settlement and will be sentenced on Feb. 23.

The Jan. 22 hearing was initially scheduled for Jan. 19 but was delayed due to weather.