SEC Sues Binance: Solana, Binance Coin, Cardano (ADA), and Dash Classified as Securities

Juni 11, 2023 Aus Von admin

• SEC has initiated legal proceedings against two prominent cryptocurrency exchanges, Coinbase and Binance.
• The SEC has identified several coins that the regulatory body considers securities according to the Securities Act of 1943.
• The foundation of the SEC’s legal action is based on the Howey Test, an established legal framework from 1946 which determines if an investment is a “security”.

SEC Sues Coinbase and Binance

The Securities and Exchange Commission (SEC) in the United States has initiated legal proceedings against two prominent cryptocurrency exchanges, Coinbase and Binance. This is due to their lack of licenses to facilitate trading in securities as well as offering staking-as-a-service offerings.

Identified Cryptocurrencies

The SEC has identified SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, NEXO, ATOM ALGO and COTI as assets classified as securities. In addition to this none of these cryptocurrencies are Proof-of-Work (PoW) coins but instead utilize alternative consensus mechanisms such as Proof-of-Stake (PoS).

Howey Test Applied To Cryptocurrency Sphere

The Howey Test was developed in 1946 after the pivotal case SEC vs. WJ Howey Co., it consists of four essential elements: an investment of money; involvement in a common enterprise; and anticipation of profits primarily from efforts of others. According to the SEC all 19 tokens traded on Binance and Coinbase satisfy this criteria due to various factors including initial sales & fundraising activities & ongoing promotion by third parties.

Potential Penalties

If found guilty those held accountable will be subjected to substantial penalties & even potential imprisonment due to their lack of licensing & authorization for trading in securities by the SEC accordingly with the Securities Act 1943.

Conclusion

As demonstrated by this article there could be serious consequences when engaging in any activity involving cryptocurrency exchanges or tokens without first obtaining proper authorizations from relevant authorities such as with regards to trading in securities or providing staking services without possessing suitable licenses for example.