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- In the lawsuit against Binance, the U.S. SEC has categorized 12 tokens, including BNB, SOL, MATIC, and ADA, as securities.
- Interestingly, Ethereum (ETH), one of the world’s largest cryptocurrencies, was conspicuously left off the list of securities.
In a new development in the cryptocurrency world, the U.S. Securities and Exchange Commission (SEC) has taken the exceptional step of explicitly designating 12 tokens as securities. This revelation came as part of the regulatory body’s lawsuit against Binance, its CEO Changpeng Zhao, and Binance U.S. The twelve tokens identified as securities are BNB (BNB), Binance USD stablecoin (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos Hub (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), and Coti (COTI).
In the lawsuit, the SEC noted,
“Since the Binance Platforms launched, Defendants have made available for trading on them crypto assets that are offered and sold as investment contracts, and thus as securities.”
The regulator also emphasized that this list is not exhaustive, leaving room for additional tokens to be categorized as such in the future.
A noteworthy omission from the SEC’s list of securities is Ethereum (ETH), the second-largest cryptocurrency by market capitalization. This absence comes despite SEC Chair Gary Gensler’s reluctance to clarify ETH’s status during a comprehensive hearing in April. Previously, Gensler had indicated to New York Magazine that
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“everything other than Bitcoin”
should be classified as a security.
In their lawsuit against Binance and its associated entities, the SEC asserts that the companies have recurrently misled customers and diverted funds to a separate investment fund owned by Zhao. This claim echoes similar allegations previously leveled against Binance’s erstwhile competitor, FTX, and its founder Sam Bankman-Fried. The SEC’s enforcement action comes in the wake of a similar lawsuit lodged by the Commodity Futures Trading Commission against Binance in March.
The announcement of the lawsuit led to a decline in the price of Bitcoin, BNB, and other implicated tokens, hinting at the lawsuit’s immediate impact on the crypto market. As this legal showdown unfolds, stakeholders in the cryptocurrency industry will undoubtedly watch closely to gauge the long-term implications of this regulatory development.
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