- The SEC intends to modify its complaint against Binance, specifically regarding third-party tokens such as Solana (SOL) and Polygon (MATIC)
- This amendment could shift the focus of the case and influence whether these tokens are classified as unregistered securities
- The judge will need to decide on the role of these tokens in the ongoing case, as the SEC’s potential withdrawal of these claims could change the trial’s trajectory
The U.S. Securities and Exchange Commission (SEC) has announced plans to amend its complaint against Binance to include so-called “third-party tokens,” such as Solana (SOL) and Polygon (MATIC). This change may affect the determination of whether these Tokens are considered unregistered securities.
Potential SEC Retreat on Third-Party Tokens
The SEC might back off on its claims against third-party tokens like Solana (SOL) and Polygon (MATIC) that were part of the case against Binance, according to a court statement from early Tuesday morning.
The SEC has let Binance and its affiliates (that’s Binance.US and founder Changpeng Zhao) know that it plans to ask for permission to change its complaint, including regarding third-party crypto assets. This is to “avoid the need for the Court to rule on the sufficiency of the allegations related to those tokens at this time.”
The dispute over third-party tokens intensified during a July 9 hearing. Binance’s lawyers said they’d read Judge Amy Berman Jackson’s ruling on June 28 as saying that third-party tokens weren’t part of the SEC case, which CoinDesk had already reported.
The judge was quick to point out that this wasn’t her intention. Third-party tokens are digital assets issued by companies other than Binance and listed on the crypto exchange.
The 10 tokens in question are SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI. The SEC says these tokens are unregistered securities.
SEC’s Changing Stance and Impact on Discovery
Tuesday’s filing was a joint response ordered by the court to both parties’ positions on how to proceed further. It was expected that the judge would examine the role third-party tokens might play in the ongoing SEC case against Binance. Instead, the SEC seems to have changed its position and now intends to drop this part of its allegations.
The defense wants to see the amended complaint before they start the discovery process.The document says that it’s too soon for the SEC to expect the defendants to agree to proceed with merit discovery on claims that might soon be amended. The defendants need to see a set of proposed revised allegations first.
Conclusions
The SEC’s change in position regarding third-party tokens could have significant implications for the case against Binance. The revision of the complaint might affect Binance’s legal strategy and delay the discovery process.
If the SEC succeeds in getting approval to amend its claims, it could re-examine the classification of these tokens as unregistered securities. Future developments will be crucial in determining the final outcome of this case and its regulatory impact on cryptocurrency tokens in general.
The Bitcoinsensus team will remain vigilant and keep you updated on any future developments regarding the SEC.
