SEC Drops Security "Claim" for Multiple Coins – CryptoMode

The Securities and Exchange Commission (SEC) is making a significant move in its ongoing legal battle with Binance. The regulatory body has informed the cryptocurrency exchange of its intention to amend the original complaint. This amendment will focus on incorporating a new category of assets called “Third Party Crypto Asset Securities.”

The SEC is broadening its scope in the case. By introducing this new classification, it aims to strengthen its legal argument against Binance. This strategic move also buys the SEC more time. Instead of the Court immediately deciding on the sufficiency of the initial allegations about certain tokens, the focus will now shift to addressing the newly introduced category of securities.

SEC and Binance Meeting May Influence Crypto Classification and Regulations

The SEC’s stance on the complaint amendment against Binance might impact the necessity for a court decision on whether tokens like SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI should be classified as securities. The SEC had previously asserted that these digital assets traded on Binance meet the Howey test criteria, thus defining them as investment contracts.

If these assets are excluded from the securities designation, it could signal a shift in how certain cryptocurrencies are perceived and regulated in the US. This change might lead to greater clarity in the regulatory landscape.

The SEC has proposed that discovery should start according to a proposed schedule, regardless of any pending motions. This discovery will proceed based on claims the Court decided to move forward within its June 28, 2024 Memorandum and Order. Any additional discovery will be addressed after the Court rules on the SEC’s motion to amend and subsequent Rule 12 motions.

However, the defendants were unwilling to agree to the commencement of discovery without reviewing the SEC’s proposed amended complaint. The SEC clarified that it does not ask defendants to conduct merits discovery on potentially new allegations. Instead, the SEC argues that it is not premature or unreasonable to begin discovery on Counts 1 and 3, along with Counts 4-13, which have already survived the defendants’ motion to dismiss. Additional discovery can be discussed if new allegations survive further motion practice.

SEC Charges Against Binance Dismissed

Binance is embroiled in legal disputes with the U.S. Securities and Exchange Commission (SEC). A recent court ruling dismissed several charges against the company and its CEO, Changpeng Zhao, related to secondary market sales of BNB and the Simple Earn program. However, other allegations, including those concerning Binance’s initial token offering and ongoing sales, remain.

Furthermore, Binance is implementing Know Your Customer (KYC) updates for UAE-based users. All residents will be contacted via email and required to submit additional documentation by December 15, 2024, to comply with regulatory standards.