In an amended complaint against cryptocurrency exchange Binance and its former CEO Changpeng Zhao, the U.S. Securities and Exchange Commission said it never intended to classify cryptocurrencies as securities.
While expanding Binance Litigation In response to the request to include the three additional tokens, the Securities and Exchange Commission withdrew the “cryptocurrency securities” assertion it has used in multiple enforcement actions against digital asset operators.
Several of the SEC's lawsuits against companies like Binance and Coinbase have been based on allegations that these companies are offering unregistered crypto securities. The industry has long maintained that no such asset class exists. On Sept. 12, the SEC filed documents that appear to support this position.
The SEC said it regrets labeling individual cryptocurrencies and groups of tokens as securities, a term it used to briefly describe various aspects of cryptocurrency sales, according to a footnote in the amended complaint.
The SEC promised to use the term “crypto securities” less frequently and apologized for any confusion it may have caused. But digital asset representatives criticized the certification as too little, too late. Echoing Coinbase CFO Paul Grewal's comments, Ripple CFO Stuart Aldeloti said the SEC filing highlights the agency's flawed regulatory approach.
Despite these developments, the SEC continues to crack down on cryptocurrencies, as revealed in an update to the Binance lawsuit, with the latest court filing including Cosmos (ATOM), Axie Infinity (AXS) and Filecoin (FIL) as unregistered securities.
Shortly before the lawsuit, the SEC also settled a lawsuit with eToro, in which the company agreed to halt almost all cryptocurrency trading. The SEC used the term “crypto securities” in the agreement.
In other related news, SEC Chairman Gary Gensler is under investigation for allegations that some hiring practices were politically motivated, with prominent Republicans like Patrick McHenry also joining the investigation into the tense SEC chairman.
