SEC wants to change its Binance complaint, removing tokens like Solana

Is Solana a security?

The question has plagued crypto pundits, regulators and politicos for years.

The Securities and Exchange Commission may have hoped to get a ruling on that issue as part of its lawsuit against Binance.

However, the regulator has apparently decided to amend its complaint against the crypto exchange to exclude the aspects dealing with third-party securities.

A plan filed jointly by the SEC and Binance to a DC court says that, if approved, the regulator will change its complaint.

That means that this court may not have to weigh whether SOL — and other tokens including those of Cardano and Polygon — are under its regulatory umbrella.

The question of whether or not cryptocurrencies are securities or not are at the centre of SEC Chair Gary Gensler’s claims that the agency should be the crypto industry’s primary regulator.

The market watchdog has fired off a barrage of enforcement actions against crypto heavyweights over the years — including Binance, Coinbase and Kraken — arguing that they have violated security laws.

The case

The SEC sued Binance in June 2023 for securities law violations and fraud charges.

Along with the complaint, the SEC included a list of 10 tokens — including Solana, the world’s third largest cryptocurrency — that the regulator said are securities.

Binance asked the court to throw out its case, but Judge Amy Berman Jackson said most of it should proceed.

The SEC has a lot riding on its suit against Binance.

Even though three US government departments settled charges with Binance last November — culminating in a $4.3 billion penalty — Gensler and the SEC opted out of the deal.

Instead, the SEC maintained its lawsuit against the world’s top crypto exchange and its former CEO, Changpeng Zhao.

The SEC also lodged a similar suit against Coinbase the same week that it filed the suit against Binance, and added a list of tokens in that suit too.

Crypto market movers

• Bitcoin is down 4.3% over the past 24 hours and is trading at $66,473.
• Ethereum is down 0.5% and is trading at $3,337.

What we’re reading

• Solana has soared 35% this month. Four experts on where it will go next — DL News.
• Are NFTs Securities Offerings? Two Artists Sue the SEC to Find Out — Unchained.
• HSBC Australia Halts Crypto Exchange Payments Following $171M Scam — Milk Road.
• New memecoin craze propels Solana daily volume to $2bn eclipsing major rivals — DL News.

Joanna Wright is DL News’ regulatory correspondent. Email at joanna@dlnews.com.