SEC May Hold Off Claims Solana is a Securities in Binance Lawsuit

Solana, Cardanoand polygon Everyone can breathe a tentative sigh of relief, as the Securities and Exchange Commission (SEC) seeks to assert in its lawsuit against cryptocurrency exchange Binance that the exchange is an unregistered security, according to new court documents.

The SEC wrote in a joint status report filed early Tuesday morning that it intends to amend its Binance lawsuit to suspend claims regarding “third-party crypto assets.” But SOL, ADA, and MATIC aren’t entirely out of the woods yet.

The amendments do not mean the SEC has dismissed the unregistered securities claim or that a judge has dismissed it. The update “eliminates the need for a court to rule on the sufficiency of the claims regarding the current tokens,” the regulator wrote in its filing.

In very simple terms, this means that the SEC has agreed to put a pin on it.

But the judge overseeing the case may ultimately have to rule on whether SOL, ADA, MATIC and other tokens meet the criteria to be considered securities.

In its original complaint, the SEC also alleged: Filecoin (father), Cosmos (ATOM), Sandbox (SAND), Decentralization (Mana), Algorand (what), Exi Infinity (AXS) and Coti (COTI) are both unregistered securities.

The SEC lawsuit, filed in June 2023, charges Binance and exchange CEO Changpeng Zhao with 13 counts, including the allegation that they attempted to circumvent U.S. securities laws by co-mingling customer funds and using “false controls” to determine who could trade with the company.

Last month, the judge approved Binance’s motion to dismiss charges related to the secondary sale of its BNB exchange token and Simple Earn program. However, the judge said other charges, including those against the exchange’s U.S. subsidiary, Binance.US, will proceed.

“We have always operated our business in a compliant manner, taking advantage of the limited guidance the SEC has provided to the cryptocurrency industry,” Binance.US said in a statement posted to Twitter at the time. “The fight continues.”

But now, the elimination of unregistered security questions depends on whether the SEC and Binance agree to a timely disclosure and submit evidence.

The SEC wants to start the investigation immediately after the amended complaint is filed. However, Binance has refused, stating that it “cannot agree to the investigation without reviewing the SEC’s proposed amended complaint.” Instead, Binance would prefer to hold a meeting within two weeks after the SEC’s amended complaint is filed with the court to set a timeline for the investigation.

Until then, “it would be premature and unreasonable to expect that the SEC will agree to conduct a substantive investigation into the claims, which may soon require permission to amend the claims,” the attorneys wrote.