• The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, alleging that many tokens trading on the platform are unregistered securities.
• The complaint includes language that clarifies its judgment of certain tokens as securities, but does not address the status of Ethereum—the industry frontrunner.
• This raises questions about why the SEC is avoiding action against Ethereum when all other tokens are fair game.
SEC Lawsuit Against Binance
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against cryptocurrency exchange Binance, alleging that many tokens trading on the platform are unregistered securities. The complaint includes language that clarifies its judgment of certain tokens as securities, including Solana, Cardano, Polygon, Filecoin, Cosmos, The Sandbox, Decentraland, Algorand, Axie Infinity and Coti.
Ethereum’s Status Remains Unclear
However, the SEC’s filing avoids taking action against Ethereum—the industry frontrunner—which raises questions about its legal status under US law. Is Ethereum a security or something else? Why is the SEC silent on this issue?
The SEC’s Definition of Security
The SEC defines a security as any asset offered for investment in a common enterprise with an expectation of profits based primarily on the efforts of others. According to this definition, it appears likely that some cryptocurrencies could be considered securities if they meet these criteria and have been sold to investors without being registered with the SEC first.
What Does This Mean For Ethereum?
It is unclear whether or not Etheruem meets this definition given its decentralized nature and lack of reliance on any one individual or entity for profits—two factors which may make it difficult for regulators to classify it as such under current laws. As such,, it remains unclear what role regulators could play in regulating ether transactions if they decide to do so at all in future regulatory actions..
Conclusion
Today’s filing by the SEC reinforces their stance in classifying some cryptocurrencies as securities while avoiding any definitive opinion regarding Ethereum’s status at this time . It will be interesting to see how regulators approach this issue moving forward and how their decisions impact both existing markets and new projects launching in 2021 and beyond .