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Sujit Kumar
Jul 31, 2024
by Sujit Kumar

SEC Retracts Request in Binance Lawsuit but Solana's Security Status Unclear

Solana's Security

Table of contents

  1. Ongoing Crypto Exchange Lawsuits
  2. Judicial Perspectives
  3. Speculations and Motives
  4. Implications for Affected Tokens
The U.S. Securities and Exchange Commission (SEC) has recently made headlines by retracting its request for a court decision on the security status of Solana (SOL) in the Binance lawsuit. This move does not necessarily indicate that the SEC considers SOL to be a non-security. Jake Chervinsky, chief legal officer at Variant Fund, emphasized this point in a recent post on X (formerly Twitter).

Ongoing Crypto Exchange Lawsuits

The SEC's amended complaint no longer asks the court to determine whether certain tokens, including SOL, are securities. Despite this, the SEC continues to refer to these tokens as securities in other lawsuits, such as the one involving Coinbase. This indicates that the regulatory body's stance on these tokens remains consistent across different cases.

Judicial Perspectives

Miles Jennings, general counsel at a16z Crypto, explained that the SEC's decision might be influenced by the different judicial perspectives in the Binance and Coinbase cases. Judge Amy Berman Jackson, presiding over the Binance case, set a high bar for applying the Howey test to secondary transactions, making it less worthwhile for the SEC to pursue. Conversely, Judge Katherine Polk Failla in the Coinbase case appears more inclined to agree with the SEC's position, prompting the regulatory body to focus its efforts there.

Speculations and Motives

Jennings speculates that the SEC's actions may be driven by political motives, informed by insights into the agency's internal behavior. He remains unconvinced that the SEC has made a strong enough case to link token sales on secondary markets to the managerial efforts of token issuers.

Implications for Affected Tokens

The SEC's lawsuit against Binance initially claimed that several tokens, including Solana, BNB, Cardano, Polygon, Sandbox, MANA, and Axie Infinity, were securities. In total, the SEC has labeled at least 68 tokens as securities, impacting over $100 billion worth of cryptocurrencies.

This ongoing legal battle highlights the complexities and uncertainties surrounding the classification of cryptocurrencies as securities, with significant implications for the market and its participants. As the SEC continues its enforcement actions, the crypto community remains watchful of the evolving regulatory landscape.

Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
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SEC Retracts Request in Binance Lawsuit but Solana's Security Status Unclear
Sujit Kumar
Sujit received his Bachelors in Science from the LNMU Darbhanga. He is currently working as a Content Strategist. He has more than three years of professional experience in information systems, security policies, technologies, and Cryptocurrency. He has published 6 books in the area of information security and assurance. He has published more than 50 research articles in leading journals Regarding the Latest and Breaking Crypto News and updates. His research interests include access control, computer forensics, Digital Marketing, Web development, business hacks, player experience, and virtual storytelling.

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