Solana, polygon, cardano and other tokens are securities, says SEC in Binance lawsuit

Quick Take

  • The U.S. SEC called 12 tokens securities in its lawsuit against Binance, including BNB, SOL, MATIC and ADA.
  • Notably, the regulator did not mention ETH in this list of securities.

The U.S. Securities and Exchange Commission (SEC) today explicitly called 12 tokens securities in its lawsuit against Binance, its CEO Changpeng Zhao and Binance U.S.

Those 12 tokens are BNB (BNB), Binance USD stablecoin (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos Hub (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS,) and Coti (COTI). 

"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," the SEC said in the lawsuit regarding these 12 tokens, adding that the list is not exhaustive. 

Notably, the SEC did not name ether (ETH) as a security in the lawsuit. In April, SEC Chair Gary Gensler refused to say whether ETH, the second-largest cryptocurrency by market cap, was a security during a nearly five-hour hearing. Earlier this year, Gensler told New York Magazine that "everything other than bitcoin" is a security.

The SEC alleged in the lawsuit that Binance and affiliated companies repeatedly lied to customers and misdirected funds to a separate investment fund owned by Zhao, in an echo of similar accusations against Binance's former rival FTX and its founder Sam Bankman-Fried. The SEC enforcement action follows a similar suit filed in March by the Commodity Futures Trading Commission against Binance.

The price of bitcoin, BNB and other tokens have declined since the news of the lawsuit broke. 

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