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SEC Still Believing SOL is a Security, Say Crypto Executives
Jul. 31, 2024. 2 mins. read.
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Despite recent legal changes, the SEC likely still considers Solana a security, as it has not retracted its stance despite withdrawing a related court request in the Binance lawsuit.
Despite recent legal maneuvers, the U.S. Securities and Exchange Commission (SEC) may still consider Solana (SOL) a security, according to crypto industry executives. The SEC’s retraction of its request for a court ruling on this matter in its Binance lawsuit does not signal a change in its stance.
“There is no reason to think SEC has decided SOL is a non-security,” said Jake Chervinsky, chief legal officer at Variant Fund, in a July 30 X post. This statement refers to the SEC’s recent amendment to its complaint regarding “Third Party Crypto Asset Securities.” The regulator is no longer seeking a court decision on whether the tokens listed in the lawsuit are securities.
Chervinsky emphasized that the SEC still labels these tokens as securities in other lawsuits, including one against Coinbase. Miles Jennings, general counsel at a16z Crypto, and Justin Slaughter, policy director at Paradigm, echoed this sentiment in their own posts. Slaughter warned that many are “overreading this filing” and that it does not imply the SEC has concluded Solana and other tokens are non-securities.
Jennings noted that Judge Amy Berman Jackson set a high bar for the Howey test in the Binance case, making it inefficient for the SEC to prove these tokens were securities. However, in the Coinbase lawsuit, Judge Katherine Polk Failla appears more inclined to support the SEC’s position.
Jennings also speculated on the SEC’s strategy, noting, “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.”
The SEC’s case against Binance listed several tokens as securities, including Solana (SOL), BNB, Cardano (ADA), Polygon (MATIC), The Sandbox (SAND), Decentraland (MANA), and Axie Infinity (AXS). In total, the SEC has claimed that at least 68 tokens are securities, impacting over $100 billion worth of cryptocurrencies in the market.
This ongoing regulatory scrutiny highlights the complex and evolving legal landscape surrounding digital assets and their classification as securities.
SOURCE: SEC Still Believing SOL is a Security, Say Crypto Executives
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