The U.S. Securities and Exchange Commission (SEC) is planning to update its lawsuit against Binance, according to a report that marks the latest development in the contentious legal conflict involving the crypto exchange. In this SEC vs Binance and Solana case, the lawsuit also encompasses: The meaning of which is that they seek to evade a final ruling from the court as it regards their security determination. This revelation, which became public knowledge via a joint court filing on July 29, 2024, has sent shockwaves throughout the crypto sector. It is a high-profile case that reshapes how the SEC rule-making process around digital assets led to one of “the largest ICO throw-aways in history” and questions as to whether large cryptocurrencies are, legally speaking, securities.
Strategic shift and the implications on Solana
Additionally, the SEC is changing its approach to litigation with Binance in a bid to avoid having judicial questions over whether the firm should be classified as a third-party token like Solana. If this passes, it could fundamentally alter the U.S. regulatory situation for cryptocurrencies. The SEC has filed a request to amend its original complaint against Binance so that it does not have to go to court over whether third-party tokens are securities. This amendment attempts to postpone the court decision on whether or not these two tokens are key elements for them, however, it does nothing but put their classification into a grey area. If given, the items would not be called securities by the SEC.
Third-party assets are tokens listed on Binance but which were not issued by the exchange itself. Binance last year listed native tokens for Solana, Cardano, Polygon, Cosmos, and Filecoin among others on its US arm which the SEC claimed possessed typical characteristics of securities under Howey Test standards. About these tokens, the SEC alleges that Binance has breached federal securities laws. These recent federal court decisions have affirmed that sales of Binance tokens like the BNB token are only securities if they involve some sort of dividend or similar type of benefits. This ruling could have a broader influence on the crypto industry, including potentially impacting the SEC vs Binance and Solana litigation.
Binance’s response is it will damage the industry
Binance takes a careful stance on the SEC’s proposed amendment The exchange has asked to review the SEC’s proposed changes before committing to discovery. Binance today argued that any discovery on possibly amended claims is premature.
Reply of Defendants… by Michael Patrick Byrne on Scribd U.S. District Judge Analisa Torres is set to hear legal arguments in the case at an upcoming conference expected to be held via telephone that will focus specifically on merit discovery and depositions, according to court filings [here].: Binance’s statement regarding this filing is as follows: “It makes little sense for the SEC to press for merits type disclosures while it takes time, more than a month later after providing its initial pre-filing Notice Oral Presentation Materials (as urged by then-Chairman Clayton) […] The Court should halt what amounts now perilously approaching unwarranted dragnet straight at evidence from crypto industry participants with no warranted basis on these considerations because murky reliance claims are not detailed yet — until Defendants have alleged amended proposed allegations.” Binance in turn chided the SEC for what it called misleading comments on discovery deadlines. Indeed, the latest revelation in this SEC against Binance and Solana case is generating a great deal of debate among crypto Twitter. That the SEC viewed a different token — SOL Appreciation Right (SAR), or Solanium, as not being security is further proof to many that future investments in tokens such as ADA will be treated like securities. And it fits into the narrative of how U.S. regulators will expand their enforcement against digital assets more broadly.
Also Read- SEC vs Binance and Solana: Crypto Showdown
Potential Industry Shifts
These 2 Cases Could Determine How the US Regulates Cryptocurrency; SEC vs Binance & Solana Play This could establish a precedent for future cases that force the review of exactly what digital assets are & If the proposed modifications to the SEC are allowed, it could set a precedent for future lawsuits that may involve crypto projects or exchanges. This shift in strategy could suggest a larger reevaluation of the SEC’s crackdown on cryptocurrency.
A Milestone in Crypto Regulation
The struggle between the SEC and Binance & Solana typifies some of the hardest problems regulators -and industry participants in general- have to find solutions for. This could have a sizeable impact on how crypto is classified, traded, and regulated. To illustrate the point, look no further than the current SEC vs Binance / Solana matter for a perfect example of why crypto regulation is needed and must be transparent and balanced. Given the rapid pace of change in this industry, regulators, policymakers and market participants need to work together constructively so as to create a pathway that accommodates innovation while at the same time protects investors. Keep up with The BIT Journal for all the latest about these landmark announcements.
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