As a seasoned analyst with over two decades of experience in the financial sector, I find this development between the SEC and Binance intriguing. The footnote in question seems to suggest that the SEC may be reconsidering its stance on cryptocurrencies being considered securities. This isn’t entirely surprising, given the evolving nature of the digital asset space and the SEC’s history of adapting to new realities.
As a crypto investor, I recently noticed that Paul Grewal, the Chief Legal Officer at Coinbase, pointed out a footnote in an updated complaint submitted by the SEC in their lawsuit against Binance. This footnote may hold some significant implications for the broader cryptocurrency market and its regulatory landscape.
As an analyst, I’d like to clarify a point about the term “crypto asset securities” used by the SEC. This terminology does not equate the crypto asset itself with a security. Instead, it serves as a concise way of referring to certain types of crypto assets, a usage that has been consistent since the initial crypto asset case the SEC was involved in. The term is essentially a shorthand for these specific instances where the SEC deems crypto assets to be securities.
Furthermore, to eliminate any potential misunderstandings, the Parent Association no longer employs the abbreviated term. The SEC apologizes for any confusion that may have arisen from its usage. As the court stated, the cryptocurrency is an investment contract. It seems that the defendants are contesting the idea that even if the ten cryptocurrencies were initially offered and sold as securities during the Initial Coin Offerings (ICOs), they cease to be securities after the ICOs and do not remain securities indefinitely.
The SEC added that it believes the promotions and underlying economics of the ten cryptocurrencies involved in secondary markets haven’t significantly altered from an investment standpoint under the Howey Test. As a result, these digital assets are still being traded as investment contracts.
According to Grewal’s understanding, the footnote implied that the SEC expressed regret for any misunderstanding caused by their repeated assertion that the tokens in question function as securities.
As an analyst, I’ve noted a significant shift in the Securities and Exchange Commission’s (SEC) stance, as evident in their lawsuit against Ripple. Specifically, the SEC appears to assert that XRP, the digital asset in question, is considered a security according to their complaint filed against Ripple.
SEC veteran reacts
The take shared by the Coinbase CLO drew the attention of former SEC regional director Marc Fagel, who expressed indifference to the development in the Binance case.
Fagel responded to a user about the take shared by the Coinbase Chief Legal Officer: “Don’t you remember when we learned that the SEC was considering changes a few weeks ago, and most of Crypto Twitter thought it meant they would exclude SOL and other tokens from their complaint? However, they haven’t actually done that yet.
The SEC has requested to modify their lawsuit about the “Third Party Crypto Asset Securities” mentioned in their response to Binance’s motion to throw out the case. According to the SEC, this change means they won’t need to make a decision now on whether the accusations against those tokens are solid enough.
The Securities and Exchange Commission, in the Binance lawsuit, claimed that ten digital currencies were considered securities. These included Binance’s native token (BNB), Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Axie Infinity (AXS) and COTI (COTI).
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2024-09-13 18:51