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The United States securities regulator likely still believes Solana is a security, despite withdrawing its request to ask a court to classify tokens such as Solana, Cardano, Polygon and others as such, according to crypto executives. Meanwhile, US regulators have charged BitClout founder Nader Al-Naji with fraud.
SEC likely still believes SOL is a security, say crypto execs
The United States securities regulator did not let Solana off the hook as a security despite retracting its request for a court to decide on the matter as part of its Binance lawsuit on July 30.
“There is no reason to think SEC has decided SOL is a non-security,” said Jake Chervinsky, chief legal officer at crypto-focused venture capital firm Variant Fund in a July 30 X post.
Chervinsky’s post refers to the latest response from the Securities and Exchange Commission, seeking to amend its complaint regarding the “Third Party Crypto Asset Securities.” Essentially telling the court it is no longer asking to determine whether the tokens listed in the lawsuit are securities or not.
In separate posts, Miles Jennings, general counsel and head of decentralization at a16z Crypto, and Justin Slaughter, policy director at Paradigm, appeared to agree.
Slaughter argued that many are “overreading this filing” and that it doesn’t mean the SEC has decided that Solana and other tokens are not securities.
Jennings explained that Judge Amy Berman Jackson had set such a high bar to establish the Howey test in the Binance case that it wasn’t worth the SEC’s time and effort to prove these tokens are securities.
BitClout founder charged with fraud
The United States Securities and Exchange Commission (SEC) and the US Attorney’s Office for the Southern District of New York have charged BitClout founder Nader Al-Naji with fraud.
According to the SEC, the BitClout founder sold $257 million in unregistered securities through the project’s native token, known as BTCLT. He defrauded investors by siphoning a portion of those funds for personal use. The complaint alleged that Al-Naji spent $7 million in customer funds on luxury items and monetary gifts to family members.
The securities regulator also accused the founder of mischaracterizing the BitClout project.
“As alleged in our complaint, Al-Naji attempted to evade the federal securities laws and defraud the investing public, mistakenly believing that ‘being “fake” decentralized generally confuses regulators and deters them from going after you,’” the complaint read.
SEC backs down on claiming SOL, ADA, MATIC, other tokens are securities in Binance suit
The United States Securities and Exchange Commission (SEC) is no longer asking a court to decide and deem the tokens named in its lawsuit against crypto exchange Binance as securities.
On July 30, the SEC filed a response to the court’s minute order on July 9, 2024. In the filing, the SEC wrote that it seeks to amend its complaint regarding the “Third Party Crypto Asset Securities” defined in its opposition to Binance’s motion to dismiss.
According to the SEC, this removes the need to “issue a ruling as to the sufficiency of the allegations as to those tokens at this time.” This means the government agency no longer asks the court to decide whether the affected tokens are securities.
In its suit against Binance, the SEC claimed several tokens were securities. The list includes BNB
$587, Binance USD (BUSD), Solana
SOL
$184, Cardano
ADA
$0.40, Polygon
MATIC
$0.5144, Cosmos
ATOM
$6.01, The Sandbox
SAND
$0.33, Decentraland
MANA
$0.33, Axie Infinity
AXS
$5.81 and Coti (COTI).
