SEC Admits Mistake on Crypto Asset Securities

In the ongoing legal battle between the U.S. SEC and Binance, the regulatory body has filed a motion to modify its original complaint.

The U.S. Securities and Exchange Commission (SEC) has filed a motion to modify its original complaint in the ongoing legal battle with Binance. This move comes in response to a recent district court ruling that denied crypto exchange Kraken’s attempt to dismiss similar allegations.

In a surprising twist, the SEC's latest filing reveals that ten major crypto tokens, including Solana and Cardano, are not considered securities.

The SEC filed a request to modify its original complaint against Binance, Binance.US, and co-founder Changpeng Zhao in a U.S. District Court. The updated filing reveals a major shift in the SEC's stance, recognizing that some tokens—including Solana (SOL), Cardano (ADA), and Polygon (MATIC)—are not securities on their own.

This change comes in response to a recent court decision in the Kraken case, where the SEC's broad definitions faced significant judicial pushback. The updated complaint aims to correct earlier misunderstandings and align with the court's findings.

The newly filed documents include a redlined version of the proposed amended complaint, showing exactly what has been changed. The SEC has also included the court order from the Kraken case to provide context and clarity on its revised position.

By acknowledging these corrections, the SEC is working to refine its approach and reduce confusion about the regulatory status of these ten tokens.

Coinbase CLO Response to SEC's New Filing

Paul Grewal, Chief Legal Officer at Coinbase, quickly responded to the SEC's filing on X, pointing out an important note in the updated complaint. Grewal highlighted that the SEC has now acknowledged it may have confused by calling certain tokens securities. This marks a significant shift in the SEC's position.

Ripple's Chief Legal Officer, Stuart Alderoty, also commented, noting that while Ethereum (ETH) seems to have avoided the SEC’s scrutiny, the ten tokens still face regulatory challenges.

However, the SEC continues to allege that these assets are sold as investment contracts and will pursue regulatory enforcement against them.

What's Next for Binance?

Binance is expected to respond to the SEC’s request by October 11. The amended complaint and the SEC's evolving stance highlight the regulator's ongoing efforts to assert control over the crypto industry.