or more than a year, Binance, one of the largest cryptocurrency trading platforms in the world, has been locked into legal battles with regulators over various types of regulatory infringements.
In its original complaint, the SEC alleged that Binance executed an unlicensed securities trading platform for offering digital coins like SOL and MATIC without registration. But now the SEC seems to be having second thoughts about important parts of its case.
SEC Looks to Modify Complaint
In a joint document filed with the court on 30th July, the SEC notified the judge that it wanted to adjust its complaint against Binance. In particular, the agency said it intends to revise the claims of "Third Party Crypto Asset Securities."
This is in direct relation to those ten tokens that the SEC said were functional securities under US law from before – SOL, MATIC, SAND, FIL, ADA, COTI, ATOM, MANA, AXS, and ALGO. Removal of these claims means the SEC can side-step an imminent judicial decision regarding the legal status of blockchain assets.
Impact on Wider Crypto Regulation Debate
If the SEC strikes third-party token claims in its case, it will certainly influence how many of those emerging questions around cryptocurrency regulation are answered.
What constitutes a security has been largely undefined for several years, with various blockchains arguing their protocols only create truly decentralized networks rather than centralized investment vehicles.
With the SEC stepping away from token concerns, it could recognize the legal difficulty in proving its case on a per-token basis - leading them to course-correct. But the more difficult questions about which cryptocurrencies might be considered securities are far from settled.
