The United States securities regulator hasn’t necessarily let Solana off the hook as a security

The United States securities regulator hasn’t necessarily let Solana off the hook as a security despite retracting its request for a court to decide

The United States securities regulator may still classify Solana as a security, despite retracting its request for a court to rule on the matter in its Binance lawsuit on July 30.

“There is no reason to think SEC has decided SOL is a non-security,” said Jake Chervinsky, chief legal officer at crypto-focused venture capital firm Variant Fund in a July 30 X post.

Chervinsky’s post pertains to the latest response from the Securities and Exchange Commission, seeking to amend its complaint regarding the “Third Party Crypto Asset Securities.” In essence, the regulator is telling the court that it is no longer asking to determine whether the tokens listed in the lawsuit are securities or not.

While Chervinsky didn’t elaborate on what that “litigation tactic” may be, he highlighted that the SEC still refers to the same tokens as securities in other crypto exchange lawsuits, including its one with Coinbase.

In separate posts, Miles Jennings, general counsel and head of decentralization at a16z Crypto, and Justin Slaughter, policy director at Paradigm, seemed to agree.

Slaughter argued that many are “overreading this filing” and that it doesn’t mean the SEC has decided that Solana and other tokens are not securities.

Jennings explained that Judge Amy Berman Jackson had set such a high bar to establish the Howey test in the Binance case that it wasn’t worth the SEC’s time and effort to prove these tokens are securities.

However, Judge Katherine Polk Failla in the Coinbase lawsuit seems more “inclined” to agree with the SEC’s position — hence, it isn’t worth making the same request made in the Binance lawsuit.

Jennings added that he isn’t convinced the SEC has mounted a strong enough case to establish the connection between token sales on secondary markets and the managerial efforts of token issuers.

“Obviously, I’m speculating about their political motive, but that speculation is informed by information I’m privy to about the SEC’s behavior behind closed doors,” he noted.

Related: Artists sue SEC over confusing security status of NFTs

“I think people are overreading this filing,” said Slaughter. “It does not mean the SEC has decided that SOL and other tokens are not securities. In fact, the SEC continues to allege that many tokens are securities in other filings (e.g., Coinbase).”

Which tokens are affected?In its suit against Binance, the SEC claimed several tokens were securities. The list includes Solana SOL $183 , BNB BNB $587 , Cardano ADA $0.40 , Polygon MATIC $0.5164 , Sandbox SAND $0.33 , Decentraland MANA $0.33 and Axie Infinity AXS $5.91 .

SOL

$183

BNB

$587

ADA

$0.40

MATIC

$0.5164

SAND

$0.33

MANA

$0.33

AXS

$5.91

The SEC has, at one point, claimed at least 68 tokens are securities, affecting more than $100 billion worth of cryptocurrencies in the market.

Magazine: THORChain founder and his plan to ‘vampire attack’ all of DeFi