Despite visible optimism within the crypto community, doubts persist that Solana and other digital tokens could still be classified as securities by the U.S. regulators. This follows recent moves by the Securities and Exchange Commission (SEC) to retract a directive for the determination of tokens’ status in its ongoing lawsuit with Binance.
Jake Chervinsky, Chief Legal Officer at crypto-centric venture capital firm, Variant Fund, cautioned against assuming that the SEC had excluded SOL as a security. He cited that the SEC’s request to adjust its complaint regarding the “Third Party Crypto Asset Securities” doesn’t necessarily situate tokens like SOL out of the security specter.
Chervinsky mentioned that despite the changes in the Binance lawsuit, the SEC continues to refer to many tokens as securities in other crypto exchange lawsuits, such as its case with Coinbase. This point was echoed in separate statements by Miles Jennings, General Counsel and Head of Decentralization at a16z Crypto, and Justin Slaughter, Policy Director at Paradigm.
According to Jennings, Judge Amy Berman Jackson in the Binance case set high qualification standards, making it potentially impractical for the SEC to argue that said tokens are securities. He is skeptical about the SEC establishing succinctly the linkage between token sales on secondary markets and the management efforts of token issuers.
Regardless of recent developments, the posture of regulatory authorities towards Solana and similar tokens remains sketchy, hinting at a continuing tense relationship between the crypto world and regulators.