SEC increased the list of tokens it considers securities, bringing added enforcement action against Binance in an ongoing lawsuit.
The US Securities and Exchange Commission (SEC) takes additional action against Binance in the ongoing legal tango that both parties have been engaged in. Its updated court filings suggest that the exchange has illegally listed, promoted, and sold an additional inventory of securities—tokens that the SEC newly considered securities.
Those tokens include Axie Infinity (AXS), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), and Decentraland (MANA), as the regulator continues to exert its influence on the industry. However, not many are satisfied with the approach it takes, unfairly considering crypto assets securities and throwing the book at numerous businesses dealing with the asset class.
In the latest update to the suit, it brought against Binance, the SEC said the company and its US affiliate, BAM Trading, promote tokens, recently considered as securities, to investors and stated that it showcases their returns. “Binance and BAM Trading fill these markets with information republishing and amplifying the issuer and promoter statements and activity promoting [tokens] as an investment.” The SEC also iterated that the exchange did not mention the risks and legal status of the tokens offered in its US and offshore platforms.
The SEC Flip Flops Around What It Considers Securities
While the SEC’s continued enforcement action has riled up quite a number of crypto figures, its recent comments in a filing related to this suit have led to multiple individuals calling it out for its convoluted approach. The SEC admitted that the term “crypto asset security,” which it has used to label tokens as securities, does not mean the tokens are securities. Instead, it said the term referred to “the full set of contracts, expectations, and understandings centered on the sales and distribution of the [crypto asset].”
Coinbase’s chief legal officer, Paul Grewal, took to X to make his frustration known. “@SECGov absolutely “maintained” that tokens themselves are securities is clear from the long record of their regulation by enforcement campaign. Why mislead the Court?” Ripple’s chief legal officer Stuart Alderoty mentioned, “Think it’s time for @SECgov to admit it has become a twisted pretzel of contradictions.”
