The U.S. Securities and Exchange Commission (SEC) has surprised the market by backtracking on its categorization of “cryptoassets” in its lawsuit against Binance. In a revised complaint filed on September 12, the SEC removed the controversial label, admitting that the terminology used did not adequately reflect the nature of digital assets. The retraction marks a significant shift in the agency’s approach, which had previously classified various tokens as unregistered securities.
Despite the pullback on the use of the term “cryptoasset,” the SEC has maintained its stance on a few specific cryptocurrencies, including Cosmos Hub, Axie Infinity and Filecoin, which continue to face charges for allegedly issuing unregistered securities. The move, however, has been widely criticized by legal experts, who point to inconsistencies in the SEC’s regulatory strategy.
Legal leaders at companies including Coinbase and Ripple have repeatedly said the SEC’s piecemeal approach highlights a lack of clarity in regulating the digital asset market. Stuart Alderoty, Ripple’s chief legal officer, was one of the most vocal critics, saying the recent retraction only reinforces the agency’s contradictions as it struggles to apply a traditional regulatory framework to a rapidly evolving industry.
This change in the SEC's discourse may signal an attempt to reevaluate its stance on digital assets, but uncertainties about cryptocurrency regulation remain, leaving the sector in a scenario of uncertainty.
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