Lawyer and Chief Legal Officer at Variant fund, Jake Chervinsky, says the SEC’s request to amend its complaint against Binance does not signal that the regulator no longer regards Solana, or the other crypto mentioned in the case, to be unregistered securities. Lawyer Says SEC Unlikely Changed Stance on Whether Solana is a Security or Not
Chervinsky says the move is purely a “litigation tactic” on the SEC’s part and notes the regulator still refers to Solana and some of the other tokens as securities in its other legal cases, including its case against Coinbase.
Other senior figures support Chervinsky’s view, saying the significance of the SEC’s apparent backdown is limited to the Binance case and has no broader implications for SEC policies.
The news earlier this week that the SEC had sought to amend its complaint against Binance, potentially removing the requirement for the judge to decide the security status of several cryptocurrencies including Solana (SOL), had many people believing the SEC had decided these assets were, in fact, not securities.
But lawyer and Chief Legal Officer (CLO) at Variant Fund, Jake Chervinsky, says there’s no reason to believe the SEC has changed its stance on SOL or any other cryptocurrency named in the Binance case.
Instead, Chervinsky says the SEC’s back down in the Binance case is purely a “litigation tactic” to make their case against Binance more winnable and he notes the regulator continues to refer to many of these cryptocurrencies as securities in other legal cases, including its case against Coinbase.
Binance Back Down Simply Legal Manoeuvring and Politics
Posting on X / Twitter yesterday, Chervinsky shared his thoughts on the SEC’s back down in its case against Binance, saying it’s essentially meaningless with regard to whether the regulator believes Solana is a security:
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Others also chimed in in agreement with Chervinsky. Justin Slaughter, policy director at Paradigm and previously a senior adviser at the SEC, pointed out many people are “overreading” the SEC’s actions, emphasising that they don’t necessarily have implications beyond the Binance case:
Meanwhile, Miles Jennings, general counsel at web3 venture fund a16z Crypto, said the explanation for the SEC’s backdown in the Binance case is simply “politics”. Jennings added that the judge in the Binance case has imposed a higher standard for the SEC to establish that Solana (and the other cryptocurrencies in the case) are securities than other judges have in other cases, so the regulator decided to remove that aspect of its complaint to simplify the case and increase its chances of getting a win:
Many Tokens Affected Beyond SOL
Although most of the talk is about the implications for Solana, there are several other cryptocurrencies listed in the Binance case which could potentially be impacted, including BNB (BNB), Binance USD (BUSD), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Axie Inifinity (AXS) and COTI (COTI). Including Solana, these cryptocurrencies currently have a combined market cap of over US$100 billion per data from CoinGecko.Lawyer Says SEC Unlikely Changed Stance on Whether Solana is a Security or Not
According to CoinDesk, as of mid-2023 the SEC had alleged that 68 cryptocurrencies are unregistered securities across all of its litigation efforts against the digital asset industry.
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