The U.S. Securities and Exchange Commission (SEC) has intensified its legal battle against Binance, one of the world’s largest cryptocurrency exchanges, by broadening its lawsuit to include additional tokens that have recently been categorized as securities.
In an updated filing, the SEC identified new tokens—Axie Infinity (AXS), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), and Decentraland (MANA)—which it now considers securities. This move highlights the regulator’s ongoing efforts to impose tighter control over the cryptocurrency market by classifying various digital assets under securities law.
The SEC’s amended lawsuit accuses Binance and its U.S. subsidiary, BAM Trading, of facilitating transactions involving these tokens, despite their new status as securities. The agency alleges that Binance promoted these tokens as investment opportunities, relying on marketing efforts from token issuers and promoters to attract investors.
Central to the SEC’s case is the claim that Binance has not obtained the required registrations to operate as a clearing agency, broker-dealer, or exchange. The agency argues that Binance failed to provide sufficient disclosure on the risks and legalities of the tokens being traded, while unlawfully using interstate commerce mechanisms to execute securities transactions for others.
This legal escalation has sparked criticism over the SEC’s approach to cryptocurrency regulation. The agency’s recognition of the ambiguous term “crypto asset security” has further fueled accusations of inconsistent regulatory practices.
Critics within the industry have voiced their concerns. Stuart Alderoty, Ripple’s chief legal officer, highlighted discrepancies in the SEC’s claims, referencing irregularities in the updated lawsuit. Similarly, Paul Grewal, Coinbase’s chief legal officer, questioned the SEC’s shifting position, particularly its characterization of XRP as a security during the 2020 lawsuit against Ripple, suggesting that the regulator’s inconsistent stance risks confusing courts and market participants.
As the legal confrontation between Binance and the SEC unfolds, it underscores the growing tension between cryptocurrency exchanges and regulatory authorities, which will likely have far-reaching implications for the future of cryptocurrency regulation and enforcement in the U.S.
Related topics:
Grayscale Launches XRP Trust, Setting Stage for Potential ETF
Uniswap CEO Hayden Adams Denies Claims of Charging for Protocol Deployment
Trump Announces Crypto Platform, World Liberty Financial, Launching September 16
