Securities and Exchange Commission’s (SEC) case against Binance has stirred discussions in the crypto community about the regulatory status of certain cryptocurrencies. On July 30, the SEC withdrew its request for the court to decide whether certain tokens, including Solana (SOL), are securities as part of its lawsuit against Binance. However, this move has led some experts to caution that Solana and other tokens are not necessarily clear yet.
The SEC’s decision to amend its complaint, which initially sought clarity on whether several cryptocurrencies are securities, has raised eyebrows. Jake Chervinsky, Chief Legal Officer at Variant Fund, argues that the SEC’s withdrawal does not imply a shift in its stance on Solana’s status as a security.
The SEC still refers to these tokens as securities in other legal battles, notably its ongoing lawsuit with Coinbase. This indicates that the SEC might be employing a strategic legal maneuver rather than altering its position on these cryptocurrencies‘ regulatory status.
Miles Jennings, General Counsel at a16z Crypto, and Justin Slaughter, Policy Director at Paradigm, also voiced similar concerns. They contend that many observers are reading too much into the SEC’s recent filing. The move to retract the request might be more about legal strategy than an indication of a policy change.
According to Jennings, the presiding judge in the Binance case, Amy Berman Jackson, set a high bar to apply the Howey test, which determines whether a transaction qualifies as an investment contract. Consequently, it may not be in the SEC’s interest to pursue this angle in the Binance lawsuit.
Investors Flock to Solana Amid Ethereum’s Post-ETF Struggles: Here’s WhyHowever, in the Coinbase lawsuit, Judge Katherine Polk Failla appears more open to the SEC’s interpretation. This could explain why the SEC chose not to pursue a determination of securities status in the Binance case while still doing so in other lawsuits. Jennings also speculates that the SEC’s actions might be politically motivated, influenced by internal information about the agency’s strategic objectives.
In its case against Binance, the SEC listed several tokens as securities. These include Solana (SOL), Binance Coin (BNB), Cardano (ADA), Polygon (MATIC), Sandbox (SAND), Decentraland (MANA), and Axie Infinity (AXS). The SEC’s claims extend beyond these tokens, having labeled at least 68 tokens as securities, impacting over $100 billion worth of cryptocurrencies.
