Crypto Executives: Solana Not Off the SEC's Security Radar

Key Takeaways

Crypto executives believe the SEC may still consider Solana a security, despite recent changes to its complaint in the Binance lawsuit;
They argue the SEC's tactics in the Binance case do not indicate a policy shift, as the agency continues to label the token as a security in other cases;
The SEC's broader claims have labeled at least 61 tokens as securities.

Cryptocurrency industry leaders say that the US Securities and Exchange Commission (SEC) may still view Solana (SOL) as a security, despite recently amending its complaint on the matter in its lawsuit against Binance.

Jake Chervinsky, the chief legal officer at the crypto venture capital firm Variant Fund, commented in a July 30 post on X that there's no clear indication that the SEC has changed its stance on Solana being a security.

"That they don't want to do discovery on a dozen tokens in the Binance case appears to be a litigation tactic, not a change in policy," he pointed out. "Note the SEC still calls these tokens securities in the other exchange cases."

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Supporting this perspective, Miles Jennings, general counsel and head of decentralization at a16z Crypto, noted that Judge Amy Berman Jackson had set a particularly stringent standard for establishing the Howey test in the Binance case, which might have discouraged the SEC from pursuing the classification of these tokens as securities in this specific case.

In contrast, Judge Katherine Polk Failla, presiding over the Coinbase lawsuit, appears more receptive to the SEC's arguments, making it more strategic for the SEC to focus its efforts there.

Jennings also expressed skepticism about the SEC's ability to convincingly link token sales on secondary markets to the managerial efforts of the token issuers, which is a key aspect of proving they are securities.

In its lawsuit against Binance, the SEC had initially labeled several tokens, including Solana (SOL), BNB, Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), Axie Infinity (AXS), The Sandbox (SAND), Decentraland (MANA), COTI, and Binance USD (BUSD), as securities.

This list is part of a broader SEC claim that has, at one point, categorized at least 61 tokens as securities, which meant that the regulator had authority over an estimated $100 billion worth of assets in the crypto market.

Thus, while the SEC has momentarily withdrawn its court request concerning Solana's status in the Binance lawsuit, industry experts believe the regulator still views SOL as a security, continuing to pursue similar claims in other legal battles.