Ripple’s Legal Battle Gains Momentum As SEC Drops Security Claims Against Multiple Cryptos

The US Securities and Exchange Commission (SEC) has amended its complaint against Binance, removing the need for the court to issue a ruling on the cryptocurrencies that the regulator considers to be securities.

The amended complaint has triggered discussions within the Ripple community about its potential impact on the legal tussle with the SEC that has dragged on since 2020.

SEC Drops Security Claims Against Several Cryptos

The SEC filed a lawsuit against Binance last year, and in its charges, the regulator claimed that several third-party tokens were unregistered securities. These tokens include ADA, SOL, SAND, MATIC, AXS, MANA, FIL, COTI, ATOM and MANA.

In a recent filing, the SEC revealed that it no longer intends to pursue the regulatory status of these tokens as part of its lawsuit against the Binance exchange. The regulator said the defendants were already made aware of the changes.

According to its statement, the SEC was “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 ruling comes weeks after Judge Amy Berman Jackson ruled that BNB secondary security sales do not constitute securities. As ZyCrypto reported, Judge Jackson’s ruling followed the precedent of Judge Analisa Torres last year, which stated that XRP sales on exchanges are not considered securities.

The developments in the Binance vs. SEC case have triggered debate from the Ripple community, who believe the regulator lacks clarity. 

Ripple CEO Accuses SEC of “Hypocrisy”

Ripple CEO Brad Garlinghouse noted that the amended complaint against Binance was more evidence of the SEC’s hypocrisy. He stated that the SEC was applying rules “haphazardly,” which created confusion across the industry.

More evidence of SEC hypocrisy.

Chair Gensler testifies the rules are clear, yet his SEC can't figure them out and applies them haphazardly, festering more industry confusion.

A political agenda and/or bad faith litigation tactics. Def not a “faithful allegiance to the law". https://t.co/iX8IdvaW92

— Brad Garlinghouse (@bgarlinghouse) July 30, 2024

Ripple’s Chief Legal Officer, Stuart Alderoty, also weighed in on the matter, accusing the regulator of contradicting itself.

Alderoty stated that despite the SEC dropping claims that the 10 tokens were securities in the Binance case, it still categorized them as securities in the lawsuit against Coinbase.

“When a judge signals B.S. on the SEC’s claim that 10 tokens on Binance are securities, the SEC says “never mind.” But these tokens are left out to dry in the Coinbase suit. This isn’t how to regulate,” Alderoty argued.

The SEC sued Coinbase last year on similar charges to Binance, including offering unregistered securities and operating an unregistered brokerage platform.