SEC’s Binance Suit Gets Revised; Ripple Rallies in Response

SEC’s Binance Suit Gets Revised; Ripple Rallies in Response

The ongoing legal battle between the crypto exchange Binance and the Securities and Exchange Commission (SEC) took another turn this week.

The SEC has notified Binance that it intends to revise its suit to exclude the charges related to the trading of ‘unregistered securities’.

The classification of crypto tokens as unregistered securities has been central to many of the legal struggles between the SEC and the crypto industry.

The SEC was struggling against unfavorable rulings in this portion of the case, so they amended the complaint to sidestep the issue.

The 10 tokens named in the complaint were SOL, AXS, MATIC, ALGO, ATOM, SAND, MANA, FIL, ADA and COTI.

Despite not being named in the suit, XRP rallied 7% on the hope that this retreat by the SEC would help Ripple in its own legal struggle.

Bulk of SEC’s Binance Suit Goes Ahead

While many crypto enthusiasts interpreted this revision to the suit as a sign of further regulatory easing, things may not be so simple.

This revision opens the way for the bulk of the SEC’s Binance suit to go ahead.

The SEC’s suit still covers a range of serious charges, such as inflating trading volumes. 

The removal of the unregistered securities issue from the SEC’s suit simply makes it easier to prosecute the rest of the case.

“The SEC informed Defendants that it intends to seek leave to amend its Complaint, including with respect to the ‘Third Party Crypto Asset Securities’, obviating the need for the Court to issue a ruling as to the sufficiency of the allegations as to those tokens at this time.”
– Official Securities and Exchange Commission statement.

The growing politicization of crypto in the 2024 U.S. elections has people looking for any signs of broader regulatory change.

Despite the uncertainty surrounding the SEC’s move, this retreat from the contentious issue of its unregistered securities classification for crypto tokens is a win for the industry.

Is the Ripple Rally Justified?

Although XRP was not among the 10 tokens involved in the SEC’s Binance suit, it still rallied 7% in the hopes that this revision would benefit Ripple in its own struggle with the SEC.

The core of the case against Ripple is about the sale of XRP, which the SEC includes in its list of unregistered securities.

 The belief is that if the SEC had to retreat on this topic in its Binance case, then it would need to give up on its Ripple case altogether.

However, this ignores the fact that the SEC still has a broad case to make against Binance.

The SEC may believe that the Ripple case is the best venue to have the issue of unregistered securities decided.

The initial 7% rally in XRP has already started to fade as cooler heads prevail.

A meeting between Ripple and the SEC has been canceled, though this has been interpreted both positively and negatively.