Recent developments in the crypto market have brought some giants in the industry under the microscope. The US Securities and Exchange Commission made a striking move against Binance, one of the world’s leading crypto exchanges, for alleged multiple violations of federal securities laws. In this case, he used the term ‘securities’ for 12 altcoins, including MATIC and FIL.
SEC: MATIC, BNB, FIL and these coins are ‘securities’
At the center of the lawsuit is Binance’s own native BNB token and Binance-linked BUSD stablecoin. Additionally, other crypto assets include offering unregistered securities to the public. The SEC’s lawsuit states that Binance allows the trading of crypto assets, which are essentially securities. These include, but are not limited to:
Binance Coin (BNB), Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), Filecoin (FIL), Sandbox (SAND), Decentraland (MANA), Algorand (ALGO) ), Axie Infinity (AXS), and COTI (COTI).
As you follow on Kriptokoin.com, the news has caused confusion among crypto enthusiasts. In the past hour, a significant wave of sales has come. Thus, it created over $210 million in liquidation across the market.
Crypto market crashed after SEC announcement / Source: TradingViewThe SEC also accuses Binance of violating securities laws through its staking service. According to the lawsuit, Binance allowed client funds to be mixed together, a practice that typically conflicts with standard financial regulations.
The stakes are high for Binance and its founder, Changpeng Zhao. The lawsuit alleges that Zhao secretly controls Binance.US, the American arm of the global crypto exchange. This case raises important questions about the nature of crypto assets. Indeed, the SEC’s stance offers a broadening interpretation of what constitutes a security. As such, the implications for the crypto industry are profound, with crypto assets such as SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI now potentially falling under this umbrella.
SEC called securities to SOL, MATIC, and ADA
A few months after the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against largest crypto exchange Binance, the SEC followed suit on Monday, accusing the company of misusing user funds and lying to regulators. Interestingly, the agency has named several cryptocurrencies as securities, including some of the top 10 tokens. Meanwhile, the new SEC Binance lawsuit is emerging as another major hurdle not just for Binance but for the entire crypto market.
More importantly for the crypto trader community, the SEC complaint mentioned that Cardano (ADA), Polygon (MATIC), and Solana (SOL) are traded as securities on the platform. There is an ongoing confusion about whether cryptocurrencies are securities or commodities. In this case, it contributed to that. In the complaint, the SEC classified these assets as securities:
Since the Binance platforms went into operation, defendants have traded crypto assets offered and sold as investment contracts and thus securities.
Meanwhile, a recent draft proposal in the US addresses these gaps in cryptocurrency regulations. The SEC claims that many cryptocurrencies are securities. Despite this, the lack of proper procedures to follow in terms of registering crypto assets as securities with the SEC remains an urgent question.
Cryptocurrencies crash after SEC accusation
After the lawsuit filed by the SEC, altcoins are experiencing the biggest losses. Most of the tokens we mentioned have dropped 5%-10%. The entire cryptocurrency market is in red at this news. When asked about possible regulatory implications for Sky Mavis, developer of Axie Infinity, CEO Aleksander Leonard Larsen said they were “investigating”. Also, “that doesn’t change much. We continue on our way and develop our products,” he said. Polygon declined to comment on the situation.
Altcoins that the SEC calls securities / Source: Lyllah Ledesma/Messari
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