- The SEC has rolled out a list of nearly 50 cryptocurrencies, including BNB, ADA, MATIC, SOL, and others, which it believes are securities.
- The list, compiled by the analytics platform CoinGecko, does not include Bitcoin, Ethereum, or XRP.
The SEC’s Clampdown on Cryptocurrencies
With an intensifying focus on cryptocurrencies, the US Securities and Exchange Commission (SEC) has disseminated a list of digital currencies it classifies as securities. This comprehensive list, containing 48 notable cryptocurrencies, was released by CoinGecko, an analytics platform. It includes significant players in the crypto realm such as Binance Coin (BNB), Cardano (ADA), Solana (SOL), and Polygon (MATIC), among others. In a surprising twist, industry stalwarts Bitcoin, Ethereum, and XRP did not feature in this list.
The SEC’s approach towards cryptocurrencies has been fairly aggressive, barring Bitcoin and Ethereum. It argues that most digital tokens act as unregistered securities, since developers often sell tokens to investors who anticipate returns on their investments. This is a principle that mirrors how shares, stocks, and other securities operate, as stated by the SEC chair, Gary Gensler.
The SEC Vs. Ripple Labs: A Case Study
A glaring example of this crackdown is the SEC’s pursuit of Ripple Labs and its associated XRP token. The agency accused the fintech company, along with its co-founder Chris Larsen and current CEO Brad Garlinghouse, of offering XRP as unregistered securities to both institutional and retail investors, thus amassing more than $1 billion.
However, the verdict by Judge Analisa Torres this summer, as reported by U.Today, clarified that only institutional sales of XRP could be legally termed as securities, not the sales occurring in the secondary market.
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The ‘Crypto Securities’ Index and its Implications
CoinGecko has now launched an index tracking these identified ‘crypto securities.’ BNB tops this list, followed by ADA, SOL, and TRON, sorted by their market capitalization. This index, released in the first week of August, was constructed by compiling tokens that have previously been deemed as securities by the SEC in past lawsuits. According to CoinGecko, the total market cap of these ‘crypto securities’ spans a staggering $84.9 billion of the overall market – approximately 7.5% of the total crypto market capitalization of $1.21 trillion.
The SEC Chair, Gary Gensler, has maintained that the majority of cryptocurrencies should be viewed as securities, with Bitcoin being the sole exception. If this holds, the implication is that the SEC would regulate virtually all of the approximate 25,500 cryptocurrencies listed on CoinMarketCap.
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