Crypto coins
Solana, Cardano, and Polygon are just three of several tokens that the SEC said should have been classified as unregistered securities in its case against Binance. Pixabay

KEY POINTS

  • The SEC said in its latest filing that it wants to amend its Binance complaint, including on altcoins
  • Among the crypto tokens the SEC initially wanted to tag as securities in its Binance case were $SOL, $ADA, and $MATIC
  • A DeFi lawyer said the filing doesn't fully clarify whether the tokens in question were deemed securities or not

The U.S. Securities and Exchange Commission (SEC) has hinted in a filing as part of its case against cryptocurrency exchange titan Binance that it may hold off on declaring "altcoins" as unregistered securities, at least for now.

SEC seeks Binance complaint amendments

The Tuesday filing states that the regulator informed Binance of its intent to "seek leave to amend its Complaint, including with respect to the 'Third Party Crypto Asset Securities' as defined in the SEC's Omnibus Opposition to Defendants' Motion to Dismiss."

The Wall Street regulator said it seeks to amend its Binance lawsuit, including on altcoins – digital tokens beyond Bitcoin and Ethereum – so the court won't need to issue a ruling "as to the sufficiency of the allegations as to those tokens at this time."

In its June 2023 lawsuit against Binance, the SEC said Solana ($SOL), Cardano ($ADA), and Polygon ($MATIC) among others should have been tagged as unregistered securities.

Crypto community reacts

Following the SEC's decision regarding altcoins, the crypto community on X has been celebrating the development, with some users saying a $SOL exchange-traded fund (ETF) may now be possible in the future, given how the decision came after Bitcoin and Ethereum ETFs went live.

One user was unhappy with the SEC supposedly not being held accountable for a "turn on and off switch" attitude toward altcoins.

Tyler Winklevoss, the co-founder of the Gemini crypto exchange and custodial platform, thanked Republican presidential nominee Donald Trump, suggesting that the latter's support for the crypto space affected the SEC's latest move.

Michaël van de Poppe, the founder of MN Trading Consultancy, said if the tokens previously claimed by the SEC are not securities, "it's great news."

Hodder Law Firm founder Sasha Hodder said the development means the SEC "has given up its war on crypto," saying it was a "huge win" for the crypto space.

DeFi lawyer begs to disagree

Prominent decentralized finance (DeFi) defense lawyer Carlo D'Angelo noted that the SEC's filing provides only "temporary relief" to the crypto tokens the regulatory agency previously wanted to designate as securities. The move "does not fully resolve the question of whether these tokens are investment contracts and subject to SEC regulation," he pointed out.

Another X user also argued that the key takeaway from the SEC's latest filing isn't that it no longer deems $SOL, $ADA, $MATIC, and other altcoins as securities. Instead, the filing indicates that the regulator "believes it would be harder to provide its claims" that the tokens are securities "so it wasn't worth their time and effort to try to do so in this one particular case."

Remembering SEC vs Coinbase

While the SEC may have decided to change its approach in its Binance lawsuit, it is worth noting that it has a very similar case against another crypto exchange, Coinbase, wherein it alleges the same violation: Coinbase was offering services around cryptocurrencies that should have been classified as unregistered securities.

As with Binance, Coinbase allows users to buy, sell, and trade $SOL, $ADA, and $MATIC. The said case is ongoing and the parties have been engaged in a fierce legal fight for months now.

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