The U.S. Securities and Exchange Commission (SEC) has escalated its legal action against Binance, a leading cryptocurrency exchange. The SEC now classifies several tokens, such as Axie Infinity Shards, Filecoin, Cosmos’ ATOM, Sandbox, and Decentraland, as securities, widening the scope to include more claims.
However, this expansion follows a recent update where the SEC clarified that other prominent tokens like Solana and Cardano are not classified as securities.
New Allegations Against Binance
The U.S. Securities and Exchange Commission (SEC) has widened its lawsuit against Binance, including more tokens as securities. The SEC now says that Binance and its U.S. partner, BAM Trading, allowed the trading of these newly identified securities without proper registration.
The SEC claims that Binance’s platforms were flooded with promotional material from token creators and promoters, making these tokens seem like great investment opportunities.
According to the SEC, Binance’s actions helped create a market where these tokens were wrongly presented as safe investments.
Illegal Operations Allegations
In addition to these claims, the SEC’s updated complaint now accuses Binance of running as an illegal exchange, broker-dealer, and clearing agency. They say Binance was involved in trading securities without the right registrations.
The SEC also claims Binance did not properly inform users about the risks and legal issues of the tokens traded on its platforms in the U.S. and worldwide.
SEC’s Face Criticism Over Legal Approach
This broader legal action has faced criticism. Many argue that the SEC’s approach seems more like a “witch hunt” than a genuine effort to create clear rules. Critics say the SEC’s handling of the case is confusing and inconsistent, failing to give the crypto industry a clear regulatory path.
Meanwhile, Ripple chief legal officer Stuart Alderoty has pointed out inconsistencies in the SEC’s position, specifically criticizing the term “crypto asset security” as a made-up concept.
At the same time, Paul Grewal, Coinbase’s chief legal officer, has expressed concerns about the SEC’s ability to handle the complexities of the cryptocurrency market. He believes that the regulator’s contradictory statements and disorganized approach are harmful to the industry.
