SEC Plans to Amend Lawsuit Against Binance, Dropping Third-Party Tokens

The SEC intends to amend its complaint against Binance, affecting third-party tokens like Solana and Polygon, which it alleges are unregistered securities.

Key Points:

• SEC plans to amend the complaint regarding third-party tokens.
• The court may not need to rule on the status of these tokens.
• Binance awaits the amended complaint before further discovery.

In a recent court filing, the SEC disclosed its intention to amend its complaint against Binance, specifically regarding the “Third Party Crypto Asset Securities.” This move indicates that the court may not need to determine whether the 10 tokens in question, including Solana and Matic, are unregistered securities at this time. The SEC has already notified Binance, Binance.US, and its founder Changpeng Zhao of its plans to seek permission to amend its complaint, thereby avoiding the need for a court ruling on these tokens for now.

Background of the Case

The issue of third-party tokens gained prominence during a hearing on July 9. Binance’s attorneys interpreted Judge Amy Berman Jackson’s June 28 ruling on a motion to dismiss the SEC’s case as excluding third-party tokens from the case.

However, the Judge clarified that this was not her intention. The third-party tokens involved, which include SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI, are digital assets issued by companies other than Binance but listed on its exchange. The SEC has alleged these tokens are unregistered securities.

Response and Future Proceedings

The recent filing was a joint response to the court’s directive on how to proceed with the case. Initially, the judge was expected to review the role of third-party tokens in the SEC’s ongoing case against Binance. However, the SEC’s shift in position suggests it may drop this part of its allegations. The defense, in turn, wants to see the amended complaint before agreeing to further discovery.

The filing stated, “Until defendants have a set of proposed amended allegations in front of them, it is premature and unreasonable for the SEC to expect them to agree to conduct merits discovery for claims on which the SEC may soon seek leave to amend its allegations.”

Conclusion

The SEC’s decision to potentially amend its complaint marks a significant turn in its case against Binance. By possibly dropping the charges related to third-party tokens, the focus of the case may shift, impacting how the proceedings will move forward. Both parties are now awaiting the SEC’s revised complaint to determine the next steps in this high-profile legal battle.

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