SEC Seeks to Amend Securities Classifications in Binance Case: Good News for SOL?
Following a change of heart, the SEC intends to withdraw allegations against certain third-party assets, including SOL, in ongoing Binance Lawsuit.
Altcoin holders across the crypto markets breathed a sigh of relief following a key change in the SEC’s case against Binance, the industry’s largest crypto exchange.
On July 30, 2024, the U.S. Securities and Exchanges Commission indicated its intention to withdraw allegations against third-party crypto assets, including leading altcoins like SOL.
While approval of the SEC’s request means that SOL won’t be classified as a security in the Binance case, the Solana faithful aren’t completely out of the woods just yet.
SOL No Longer a Security in Binance Case
In a surprising twist, Gary Gensler’s SEC has changed its tune on a selection of altcoins it originally deemed as securities in its June 2023 filing against Binance. Court documents released on Tuesday, 30th July, indicated the SEC wouldn’t require the court “to issue a ruling as to the sufficiency of the allegations as to those tokens at this time.”
Essentially, tokens like SOL, ADA, and MATIC will not be labeled as securities in the SEC’s ongoing lawsuit against Binance. This move is believed to alleviate some of the regulatory pressure and legal uncertainty surrounding these third-party assets.
The initial filing in June 2023 sowed seeds of doubt throughout the crypto market. As a result of regulatory uncertainty, popular exchanges like Robinhood opted to delist assets like SOL from its investment platform.
The SEC has been given 30 days to formally file the amendment, after which the defendants, ie Binance, will have an additional 30 days to either consent or oppose the motion to amend.
While the SEC requested that altcoins like SOL, MATIC, and ADA be removed from consideration, the regulator will not be dropping allegations against Binance’s native assets like BNB and the exchange’s stablecoin, BUSD.
However, Solana supporters shouldn’t get too excited too soon. The SEC’s proposed amendment is limited to the Binance case alone and doesn’t extend to the SEC’s other existing lawsuits, such as its case against Coinbase.
One Step Closer to a Solana ETF?
The crypto community rallied around the announcement, expressing relief and excitement for what this amendment might mean for the future of Solana. Commentators rushed to weigh in on social media platforms like 𝕏, suggesting that the amendment was paving the way for Solana ETF approval.
Mathew Sigel, Head of Digital Assets Research at VanEck, posited that the amendment was bullish for SOL ETF prospects. Vaneck made history in June when it filed for the first spot SOL ETF in the United States, a landmark event that was swiftly followed by a second filing from 21Shares.
However, this sentiment isn’t shared by all TradFi giants. Speaking with Bloomberg, Blackrock CIO Samara Cohen doused hopes of Blackrock SOL ETF “in the near term”, arguing that SOL didn’t meet the firm’s investability criteria and claiming that Solana is yet to “meet the bar”.
Markets React to SEC Amendment
Despite the excitement, affected assets barely moved in reaction to the event. Currently exchanging hands at $183.27 based on Step Finance data, SOL price remained consistent throughout the day’s trading.
This anti-climactic action is in stark contrast to the market dynamics witnessed when the SEC initially filed the lawsuit against Binance claiming that these assets were securities. According to historical trading data, SOL price dropped 31% following the suit dipping from $21.82 to trade as low as $15.02.
While the SEC’s proposed change doesn’t extend to its ongoing suit against Coinbase or boost chances of a spot SOL ETF, crypto advocates are hopeful that the event will set a precedent for the forward regulation of digital assets in the U.S.
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