The U.S. Securities and Exchange Commission (SEC) is changing its tune about some popular cryptocurrencies. They're now saying tokens like Solana (SOL), Cardano (ADA), and Polygon (MATIC) might not be securities in their case against Binance. This is a big deal, but it's also pretty confusing.

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Here's what you need to know:

  • The SEC is backing down from calling certain tokens securities in the Binance case
  • This affects tokens like Solana (SOL), Cardano (ADA), and Polygon (MATIC)
  • The SEC wants to change its complaint against Binance
  • This move doesn't mean these tokens are officially not securities
  • The crypto community is confused and critical of the SEC's approach

So, what exactly happened?

On July 30, the SEC filed a response to the court, saying it wants to change its complaint against Binance. Specifically, they want to adjust the part about "Third Party Crypto Asset Securities." This means they're no longer asking the court to decide if tokens like SOL, ADA, and MATIC are securities, at least for now.

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Source: Court Listener

Why is this confusing?

  1. Inconsistency: The SEC still calls these same tokens securities in other cases, like the one against Coinbase.
  2. Lack of clarity: The SEC isn't saying these tokens aren't securities. They're just not pushing for a decision right now in this specific case.
  3. Mixed signals: SEC Chair Gary Gensler has repeatedly said most cryptocurrencies are securities. This move seems to contradict that stance.
  4. Political pressure: This comes as presidential candidates are trying to win over crypto-friendly voters.

The crypto community's reaction has been pretty critical. Stuart Alderoty, Ripple's chief legal officer, said on X (formerly Twitter): "When a judge signals B.S. on the SEC's claim that 10 tokens on Binance are securities, the SEC says 'never mind.' But these tokens are left out to dry in the Coinbase suit. This isn't how to regulate."

Ripple CEO Brad Garlinghouse called it "hypocrisy," saying the SEC is creating more confusion in the industry.

Some experts, like Justin Slaughter from Paradigm, think people might be reading too much into this. He suggests the SEC could still argue these tokens are securities in other cases. They might just be backing down in the Binance case to avoid a potential loss.

Why does This Matter?

  1. Market impact: When the SEC calls a token a security, it can affect its price and how it's traded.
  2. Regulatory uncertainty: This move adds to the confusion about how crypto is regulated in the U.S.
  3. Legal precedent: If the court had ruled on these tokens, it could have set an important legal precedent for the crypto industry.

What's Next?

The SEC and Binance are now arguing about when to start the discovery process (where they share evidence). The SEC wants to start right away, but Binance wants to wait until they see the SEC's new complaint.

Related: SEC Cancels Ripple Private Meeting Again - What Happened?

In the meantime, the crypto industry is left wondering: Are these tokens securities or not? The SEC's changing stance has only added to the uncertainty that's been hanging over the crypto market.

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