On Monday, the U.S. Securities and Exchange Commission (SEC) lodged 13 charges against cryptocurrency exchange Binance.
A few months after the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against the leading cryptocurrency exchange Binance, the U.S. Securities and Exchange Commission (SEC) charged the company Monday with misrepresenting user funds to regulators.
Interestingly, the agency classified as securities several cryptocurrencies, including some of the top 10 ranked tokens. In the meantime, the new SEC Binance lawsuit represents another significant obstacle for Binance and the entire cryptocurrency market.
In March 2023, the CFTC asserted that the exchange violated US laws by soliciting millions of dollars from local users. Two of the most prominent US financial regulators have charged Binance in the most recent lawsuit, putting it in arguably its worst legal position.
Solana (SOL) Cardano (ADA) Polygon (MATIC)
On Monday, the agency lodged 13 charges against the global cryptocurrency exchange with the highest trading volume. It was alleged that Binance co-founder Changpeng Zhao “CZ” mingled billions of dollars to transfer them to a European company.
Importantly for the cryptocurrency trading community, the SEC’s complaint stated that Cardano (ADA), Polygon (MATIC), and Solana (SOL) were traded as securities on the platform.
This contributes to the ongoing confusion regarding whether cryptocurrencies and crypto tokens are securities or commodities. These assets were referred to in the complaint as investment contracts:
“Since the Binance platforms launched, defendants have made available for trading on them crypto assets that are offered and sold as investment contracts, and thus as securities.”
A recent legislative proposal draft from the United States seeks to resolve these gaps in cryptocurrency regulations. Filecoin (FIL), Cosmos (ATOM), and Sandbox (SAND) are also referred to as securities.
Although the SEC considers numerous cryptocurrencies to be securities, there are no suitable registration procedures for crypto assets with the agency. As a result of the news of the SEC lawsuit against Binance, the Bitcoin price experienced a precipitous decline.
