SEC pauses securities allegations against Solana, Cardano and Polygon in Binance lawsuit

The U.S. SEC has decided to pause its allegations that the native crypto assets of Solana, Cardano and Polygon are unregistered securities in its ongoing lawsuit against Binance.

The U.S. Securities and Exchange Commission has indicated its intention to pause allegations that Solana (SOL), Cardano (ADA) and Polygon (MATIC) are unregistered securities.

The SEC filed a joint status report in the U.S. District Court for the District of Columbia, dated July 29, that reveals plans to amend its complaint against crypto exchange giant Binance, including changes to “third party crypto asset securities.” This move could offer temporary relief to the aforementioned assets, which have been under intense scrutiny and faced delistings from trading platforms due to the case and implied regulatory uncertainty.

According to the joint response, the SEC and Binance have agreed on a schedule for briefing the motion to amend and related pleadings, with the SEC’s motion to amend due within 30 days of the court’s scheduling order. For now, investors in SOL, ADA and MATIC can breathe a tentative sigh of relief, although the judge may still need to rule on whether these tokens should be deemed securities in the U.S.

Despite the news, SOL is down over 5% on the day, while ADA and MATIC saw 24-hour losses of around 4% and -1% respectively, according to data from crypto.news.

In June 2023, the SEC filed lawsuits against Binance and Coinbase, accusing the exchanges of facilitating the trading of unregistered securities. In the lawsuits, both of which have yet to be resolved, the financial watchdog stated that other tokens such as Dash (DASH), Filecoin (FIL), and NEAR Protocol (NEAR) should be classified as securities as well.

Following the SEC’s claims, the Solana Foundation and Polygon Labs publicly disagreed with the SEC’s assessment, emphasizing their commitment to operating outside of U.S. markets. Despite their stance, platforms like Robinhood and Revolut proceeded to delist the tokens targeted by the SEC.