The U.S. Securities and Exchange Commission (SEC) has expanded its lawsuit against Binance, adding new allegations that target additional tokens, including Axie Infinity (AXS), Filecoin (FIL), and Cosmos (ATOM), claiming they are unregistered securities. This latest move underscores the SEC’s ongoing efforts to tighten regulation over the cryptocurrency industry.
In the SEC’s updated legal filings, other tokens, such as Sandbox (SAND) and Decentraland (MANA), were also classified as securities, expanding the scope of the lawsuit. This action highlights the regulator’s growing focus on categorizing various digital assets under securities law to exert more regulatory control over the sector.
Expansion of Allegations
The SEC’s amended complaint accuses Binance and its U.S. affiliate, BAM Trading, of facilitating the trade of these newly classified unregistered securities. The regulator claims that Binance promoted these tokens to customers, emphasizing their potential as investment opportunities.
“Binance and BAM Trading fill these markets with information republishing and amplifying the issuer and promoter statements, promoting [tokens] as an investment,” the SEC stated in its updated filings.
Unregistered Activity Claims
The SEC’s lawsuit also reiterates that Binance operated as an unregistered exchange, broker-dealer, and clearinghouse. According to the regulator, Binance used interstate commerce to facilitate securities transactions without the required registration. This aligns with the SEC’s broader crackdown on crypto platforms it claims are acting illegally.
SEC Faces Scrutiny
The SEC’s ongoing legal battles, including its case against Kraken, have drawn criticism for inconsistencies in its arguments. Stuart Alderoty, chief legal officer at Ripple, mocked the agency for creating “crypto asset security,” a term he described as a “made-up” concept. Alderoty pointed to contradictions in the SEC’s statements, citing Footnote 6 in the amended Binance complaint as an example of the regulator’s wavering position.
Paul Grewal, chief legal officer at Coinbase, also questioned the SEC’s motives, referencing the 2020 lawsuit in which the SEC claimed XRP was a security, saying, “Why mislead the court?”
A Continuing Crackdown
The expansion of the Binance lawsuit signals the SEC’s intensifying regulatory efforts to bring crypto assets under the umbrella of securities law. As the lawsuit proceeds, the broader crypto industry will closely watch how these cases shape the regulatory landscape.
