The U.S. Securities and Exchange Commission recently announced a pause in its allegations that native crypto assets of Solana (SOL), Cardano (ADA), and Polygon (MATIC) are unregistered securities in the ongoing lawsuit against Binance. This move comes as a significant development in the crypto space, as these assets have faced intense scrutiny and potential delistings from trading platforms due to regulatory uncertainties surrounding their classification.
In a joint status report filed in the U.S. District Court for the District of Columbia on July 29, the SEC revealed plans to amend its complaint against Binance, including modifications to the classification of “third party crypto asset securities.” This agreement between the SEC and Binance establishes a schedule for briefing the motion to amend and related pleadings, with the SEC required to submit its motion within 30 days of the court’s scheduling order.
While the announcement brings temporary relief to investors in SOL, ADA, and MATIC, the judge will ultimately need to rule on whether these tokens should be considered securities in the U.S. Despite the positive development, SOL experienced a price drop of over 5% on the day, with ADA and MATIC also seeing losses of around 4% and -1%, respectively, based on data from crypto.news.
The SEC’s legal actions against Binance and Coinbase in June 2023, accusing both exchanges of facilitating the trading of unregistered securities, have created significant turbulence in the market. The lawsuits, which are still pending resolution, also named other tokens such as Dash (DASH), Filecoin (FIL), and NEAR Protocol (NEAR) as potentially falling under the securities classification.
In response to the SEC’s claims, the Solana Foundation and Polygon Labs publicly disputed the regulator’s assessment, reaffirming their commitment to operating outside of U.S. markets. Despite their stance, platforms like Robinhood and Revolut proceeded to delist the tokens targeted by the SEC, adding further complexity to the situation.
The crypto industry continues to navigate regulatory challenges, with Solana, Cardano, and Polygon at the center of the storm. While the pause on allegations provides a brief respite for investors, the ultimate outcome of the lawsuit against Binance and the classification of these assets remains uncertain. As the SEC and the crypto community engage in a legal and regulatory battle, stakeholders must remain vigilant and informed to adapt to the evolving landscape of digital assets.