The United States Securities and Exchange Commission (SEC) has broadened its lawsuit against a popular cryptocurrency exchange, Binance.
The United States Securities and Exchange Commission (SEC) has expanded its lawsuit against Binance, a major cryptocurrency exchange.
The SEC’s amended complaint now includes several more tokens—Axie Infinity (AXS), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), and Decentraland (MANA)—which the agency recently classified as securities. This move highlights the SEC’s ongoing efforts to regulate the cryptocurrency industry by classifying different digital assets as securities.
In its amended complaint, the SEC alleges that Binance and its U.S. affiliate, BAM Trading, facilitated transactions involving the newly classified securities on its platform. According to the agency, Binance’s platforms were used to disseminate promotional materials from promoters and issuers, presenting these tokens as sound investments.
This action is part of the SEC’s broader initiative to enforce governance and compliance in the cryptocurrency sector.
In its update, the SEC reiterates that Binance is not registered as a clearing agency, broker-dealer, or exchange. The agency alleges that Binance failed to disclose the risks and legality of the tokens traded on both its international and US platforms and that it used interstate commerce mechanisms to carry out securities transactions on behalf of others.
The expansion of the lawsuit has sparked criticism over the SEC’s regulatory approach. This criticism intensified recently after the SEC acknowledged the challenges in defining the term “crypto asset security,” leading to allegations of inconsistent regulation.
Ripple’s chief legal officer, Stuart Alderoty, slammed the SEC for making contradictory allegations, highlighting specific discrepancies found in the updated complaint.
Coinbase’s chief legal officer, Paul Grewal, has also pointed out apparent contradictions in the SEC’s stance. He highlighted the SEC’s previous characterization of XRP as a security in its 2020 lawsuit against Ripple, suggesting that the regulator’s shifting positions may confuse courts and stakeholders.
This ongoing legal and regulatory saga continues to influence the landscape of cryptocurrency regulation and enforcement.
Also Read: SEC Drops Solana from List of Accused Binance Securities
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