SEC Revises Binance Lawsuit: Solana, Cardano, And Polygon No Longer Considered Securities

According to a new court filing, holders of Solana (SOL), Cardano (ADA), and Polygon (MATIC) can all breathe a sigh of relief. The U.S. Securities and Exchange Commission (SEC) has backed down on its claim that they are unregistered securities in its lawsuit against global crypto exchange Binance.

SEC’s Change Of Heart

The Securities and Exchange Commission has retracted its demand for a court ruling to deem tokens such as Solana as securities.

The SEC has already informed the defendants, Binance and affiliated entities (namely Binance.US and ex-CEO Changpeng Zhao), that it “intends to seek leave to amend its complaint, including concerning the ‘Third Party Crypto Asset Securities,’ the regulator said in a joint status report dated July 30.

While the recent legal document suggests a potential shift in the SEC’s stance on crypto asset securities, the amendment is not necessarily the same as the commission dropping the unregistered security allegation or having the presiding judge remove the tokens from the case. The update would be “obviating the need for the Court to issue a ruling as to the sufficiency of the allegations as to those tokens at this time,” the filing said.

This simply means that the judge might still eventually need to rule whether SOL, ADA, MATIC, and several other tokens qualify as securities.

The SEC hit Binance and the exchange’s founder Changpeng Zhao with 13 charges in early June 2023. The agency further accused the defendants of commingling customers’ funds and attempting to skirt U.S. securities laws with “sham controls” to decide who could do business with the company.

In its original complaint, the SEC also alleged that Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), and Coti (COTI) are all unregistered securities.

The Tuesday filing was submitted in response to the court’s July 9 minute order directing Binance and the SEC to meet, confer, and file a joint submission by July 29 to outline the proposed schedule for additional proceedings. The submission should entail deadlines for any motion to amend the complaint.

SOL ETFs Now More Likely?

If the SEC opts to dismiss its claims that SOL and the other tokens in its lawsuit against Binance are securities, it could be a bullish catalyst for crypto exchange-traded fund products tied to altcoins beyond Ethereum. Notably, asset managers VanEck and 21Shares have already filed for permission to list spot Solana ETFs in the US. Moreover, Ripple CEO Brad Garlinghouse predicted earlier this year that multiple altcoins ETFs would be launched in the United States.

However, other industry pundits doubt the SEC will greenlight crypto ETFs beyond Bitcoin and Ether. As ZyCrypto reported previously, BlackRock’s Head of Digital Assets, Robert Mitchnick, indicated that while spot ETH ETFs arrived on Wall Street last week, they are unlikely to pave the way for other crypto-based ETFs.

Regardless, the SEC’s decision to withdraw its allegations could offer SOL, which is currently aiming for $200, some much-needed boost.