SEC will not require Solana to be characterized as securities
Solana, Cardano, and Polygon have a moment of tentative relief as the Securities and Exchange Commission (SEC) has expressed intentions to put aside its claims that these are unregistered securities within its legal action against the cryptocurrency exchange Binance, as revealed in a recent legal document.
The SEC is considering a revision to its Binance legal challenge to temporarily put aside claims concerning the "third-party crypto assets," as outlined in a joint status report submitted early Tuesday. However, SOL, ADA, and MATIC are not completely free from concern just yet.
This modification does not equate to the SEC withdrawing the claim of these being unregistered securities or such a claim being dismissed by a judge. Rather, the alteration would eliminate the current need for the Court to decide on the validity of these allegations regarding those tokens.
In simpler terms, the SEC has decided to pause action on this matter.
Nonetheless, the judge managing this case may still have to decide in the future whether SOL, ADA, MATIC, along with several other tokens, fulfill the criteria to be classified as securities.
Originally, the SEC's complaint pointed out that Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), and Coti (COTI) were also unregistered securities.
Launched in June 2023, the SEC's lawsuit against Binance and the exchange’s CEO Changpeng Zhao includes 13 allegations. These involve mixing client funds and attempting to circumvent U.S. securities regulations with "fake controls" to manage its dealings.
Previously, a judge accepted a motion from Binance to dismiss allegations related to the secondary sales of Binance's BNB token and its Simple Earn feature. However, the judge determined that other allegations, including those directed at the Binance.US platform, would continue.
Yet, the resolution to the unregistered security debate now depends on whether the SEC and Binance can settle on a discovery schedule, or the process of evidence exchange.
The SEC aims to start the discovery process right after submitting its revised complaint. Binance, on the other hand, has declined, stating they cannot consent to the start of discovery without examining the SEC’s revised complaint.
Instead, Binance suggests a meeting within two weeks following the submission of the SEC’s amended proposal to the court for setting a discovery timetable.
Changpeng Zhao Binance Binance.US
