SEC Adjusts Binance Lawsuit, Removes Solana, Others From List of Securities

The United States Securities and Exchange Commission (SEC), has revisited its lawsuit against the crypto exchange giant, Binance, this time, removing Solana (SOL) and other major tokens from the list of coins considered as securities. The latest update comes as a welcome development to the Solana community as investors are already eyeing a price surge catalyzed by the good news.

Notably, this comes amid severe regulatory uncertainties in the country where investors are confused about the classifications of major cryptocurrencies in the market. Experts have also speculated that the new status could set grounds for major opportunities such as a Solana ETF. The SEC decision comes after previous court rulings that have affected the classification of other digital assets.

Solana No Longer a Security?

In a July 30 filing in the US District Court for the District of Columbia, the regulatory watchdog said that it informed Binance of its plans to revise its lawsuit that previously included several cryptocurrencies as securities. The SEC stated in the joint party response that it won’t be necessary at this time for the court to rule on the classification of these cryptocurrencies.

“The SEC informed Defendants that it intends to seek leave to amend its Complaint, including with respect to the “Third Party Crypto Asset Securities” as defined in the SEC’s Omnibus Opposition to Defendants’ Motion to Dismiss, Dkt. No. 172, obviating the need for the Court to issue a ruling as to the sufficiency of the allegations as to those tokens at this time,” the SEC’s proposal reads.

Notably, the adjustment removes Solana’s classification as a security. Interestingly, this is parallel to a previous court ruling that states that the secondary sales of Binance Coin (BNB), and the BUSD stablecoins are not securities. Consequently, other major tokens like Cardano (ADA), and Polygon (MATIC), which were also previously included in the lawsuit now have a breath of fresh air.

Competing Proposed Schedule For Briefing

The SEC emphasized that both parties have met and agreed on a proposed schedule for briefing on the motion to amend related pleadings. According to the schedule, the SEC’s motion to amend will be due within 30 days of the scheduling order by the court. Binance’s response to either agree or oppose the motion to amend will be due 30 days later.

Additionally, the SEC is expected to reply in support of the motion to amend after 21 days. Moreover, the SEC response to Rule 12 Motions will be due within 30 days of entry Court’s Order resolving the SEC’s motion to amend. Finally, Binance will have to reply in support of Rule 12 Motions 21 days thereafter.

However, Binance disclosed in the joint response that the SEC’s motion to amend the complaint was not known to the defendants including BAM Management US Holdings Inc., BAM Trading Services Inc., Binance Holdings Limited, and Changpeng Zhao, until 11:53 PM ET on July 29, 2024.

Binance claimed that the SEC introduced “added the new language” stating falsely that both parties had agreed discovery would start shortly after the SEC filed a proposed amended complaint. As a result, both parties now have competing proposals.