The U.S. Securities and Exchange Commission has expanded its lawsuit against cryptocurrency exchange Binance, broadening the scope of its claims.
The SEC’s updated legal filing now lists additional tokens as securities, including Axie Infinity’s Axie Infinity Shards (AXS), Filecoin (FIL), Cosmos’ ATOM (ATOM), The Sandbox’s SAND (SAND), and Decentraland’s MANA (MANA).
These developments follow a continued pattern of efforts by the SEC to regulate the cryptocurrency industry and classify digital assets as securities.
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Expand the claim
In this latest update to the SEC v. Binance lawsuit, the regulator accuses Binance and its U.S. affiliate BAM Trading of brokering trading in tokens that are currently considered unregistered securities.
The SEC alleged that the Binance platform actively promoted these tokens, which are newly deemed securities, to customers and emphasized the potential investment returns.
“Binance and BAM Trading fill these markets with information that reposts and amplifies statements from issuers and promoters and their activities promoting (tokens) as investments.”
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Claim unregistered activity
The SEC’s amended complaint also reiterated its position that Binance operated illegally as an unregistered exchange, broker-dealer, and clearinghouse.
The regulator said Binance had at all relevant times “used the means and instruments of day-to-day trading to engage in the business of conducting securities transactions on behalf of others.”
The SEC also said in its lawsuit that Binance failed to provide adequate disclosures regarding the risks and legality of tokens traded on its international and U.S. platforms.
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SEC’s apparent contradiction
In the ongoing litigation with Kraken, the SEC is investigating Ripple after the company admitted that “cryptocurrency security” is a “made-up term,” as Ripple’s chief legal officer, Stuart Alderoty, emphasized.
Alderoty mocked the regulator for the “twisted skewer of contradictions” brought about by footnote 6 of the amended complaint against Binance, saying the regulator “regrets any confusion this may cause.”
source: Paul Gruwell
Paul Grewal, Coinbase’s chief legal officer, highlighted the regulator’s claim in the 2020 Ripple et al. lawsuit that “XRP itself is a security,” and asked the SEC, “Why are you misleading the court?”
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