Key Takeaways
- The SEC alleges Binance listed and sold ten cryptos that are unregistered securities.
- Binance vs SEC could drag on into 2025, and a new SEC chairman may be appointed by then.
- The SEC has listed approximately 68 cryptos as unregistered securities in its numerous complaints.
The U.S. Securities and Exchange Commission (SEC) has outlined intentions to make amendments to its lawsuit against cryptocurrency exchange Binance.
Though the details remain sparse, the filing led some observers to think that there could be some pending changes to how the hawkish regulator classifies cryptocurrencies in its lawsuits. Unfortunately, that doesn’t seem to be the case.
SEC Vs. Binance Update
According to a July 30, 2024, joint court filing from the SEC and Binance, the SEC has declared that it seeks to amend its complaint against Binance. Most specifically, it:
“Intends to seek leave to amend its complaint, including with respect to the ‘Third Party Crypto Asset Securities’ […] obviating the need for the Court to issue a ruling as to the sufficiency of the allegations as to those tokens at this time.”
In its complaint, the SEC named ten tokens that it alleges are unregistered securities. This includes Solana (SOL), Cardano (ADA), Polygon (MATIC), and Filecoin (FIL). This has left some to think that this could see said coins no longer defined as securities in the SEC’s complaint.
However, the SEC’s filing fails to explicitly state which portions of the “Third Party Crypto Asset Securities” it will be amending. It also didn’t provide any suggestion that it intends to adjust the status of these cryptocurrencies. This caught the ire of Ripple (XRP) boss Brad Garlinghouse, who said:
“This is more evidence of SEC hypocrisy. Chair Gensler testifies the rules are clear, yet his SEC can’t figure them out and applies them haphazardly, festering more industry confusion.”
To Garlinghouse, this is a display of political agendas in tandem with “bad faith litigation tactics,” and other crypto industry execs seem to agree.
Bad Faith Politics
The SEC will likely continue to view SOL and others as securities. As per Jake Chervinsky, lawyer and Chief Legal Officer at crypto venture capital firm Variant, the SEC probably has no intention of changing policy.
“That they don’t want to do discovery on a dozen tokens in the Binance case appears to be a litigation tactic, not a change in policy. Note the SEC still calls these tokens securities in the other exchange cases.“
Further elaborating on the move, Miles Jennings, general counsel at venture capital firm a16z Crypto, noted that this was simply a political move. According to Jennings, this isn’t about the rule of law and is instead about “lawfare.”
“So, the SEC is opting to forego their unbounded legal theories in front of a skeptical judge (Jackson), but will still pursue those claims in front of a judge that’s inclined to agree with them (Failla).”
The filing is the result of a court-ordered response, which requested a joint response from both the regulator and Binance to establish the positions of either side and perhaps find a way forward in the proceedings.
Moving Forward
The filing stresses that, at this point, it would be “premature and unreasonable” for the SEC to expect any agreements to conduct merits discovery. Therefore, things are seemingly in an odd, uncertain, and all-too-familiar gray area.
This leaves us with the conclusion that the SEC will not be making any meaningful changes to how it classifies any of the ten cryptos named in its complaint. Nor will it be extending this to the 68 or so other crypto tokens it has classified as securities at various points in time.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
