The US Securities and Exchange Commission (SEC) may be withdrawing its charges against third-party crypto tokens like Solana’s SOL as well as Polygon’s MATIC.
These digital tokens have been part of the regulator’s lengthy case against crypto exchange Binance,
Breaking: #Solana $SOL is no longer defined as a security by the SEC – July 29th – The @SECGov #SEC moves to amend complaint against @binance – seeks to no longer prove tokens such as @solana are securities.
The SEC informed Defendants that it intends to seek to amend its… pic.twitter.com/V36PQOdkec
— MartyParty (@martypartymusic) July 30, 2024
As noted in a court filing, the SEC has informed the defendants, Binance as well as other businesss entities (reportedly including Binance.US and company founder Changpeng Zhao or “CZ”). The SEC has stated that it intends to “seek leave to amend its complaint, including with respect to the ‘Third Party Crypto Asset Securities’…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 third party tokens were discussed in a hearing that was held on July 9. This was when the legal team for Binance stated that they interpreted Judge Amy Berman Jackson’s recent ruling on Binance’s motion to dismiss the SEC’s case as taking so-called third-party tokens out of the ongoing case.
The Judge stated that this had not actually been her intention.
Third-party tokens are described as virtual assets issued by different firms that are not directly working with Binance. However, these tokens have been listed by the exchange.
The 10 tokens that have now been mentioned in the complaint include the following: Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), ATOM, SAND, Decentraland (MANA), Algorand (ALGO), AXS and COTI.
The SEC had asserted that these crypto tokens may be considered unregistered securities.
But the recent filing was a court ordered joint response to the positions of the opposing sides on how to move forward with the case.
It had been assumed that the presiding judge will examine what role third-party tokens could serve in the SEC’s case against Binance.
Now, the SEC seems to have taken up a different stance and is looking to remove that part of its allegations.
This update has led to the defense team being interested in reviewing the amended complaint prior to the process of discovery.
As stated in Tuesday’s filing:
“Until defendants have a set of proposed amended allegations in front of them, it is premature and unreasonable for the SEC to expect them to agree to conduct merits discovery for claims on which the SEC may soon seek leave to amend its allegations.”
