The United States Securities and Exchange Commission has expanded its lawsuit against crypto exchange Binance to broaden the scope of its claims.
The SEC’s updated legal filings now list an additional range of tokens as securities, including Axie Infinity’s Axie Infinity Shards (AXS), Filecoin (FIL), Cosmos’ ATOM (ATOM), The Sandbox’s SAND (SAND), and Decentraland’s MANA (MANA).
The development follows the continued pattern of the SEC’s ongoing efforts to regulate the crypto industry and classify digital assets as securities.
Related: US diplomats pressure Nigeria to release detained Binance exec
Allegation expansion
In this latest update to the SEC v. Binance lawsuit, the regulator has accused Binance and its US affiliate, BAM Trading, of facilitating the trade of tokens now considered unregistered securities.
The SEC has alleged that the Binance platforms actively promote these tokens, newly deemed securities, to customers and highlight their potential investment returns.
“Binance and BAM Trading fill these markets with information republishing and amplifying the issuer and promoter statements and activity promoting [tokens] as an investment.”
Related: Kazakhstan mulls Binance, Bybit for digital asset trading
Unregistered activity claims
The SEC’s amendment to the complaint also reiterates its position that Binance operated illegally as an unregistered exchange, broker-dealer and clearing agency.
The regulator stated that, at all relevant times, Binance “used means and instrumentalities of interstate commerce to engage in the business of effecting transactions in securities for the account of others.”
In the claims, the SEC also stated that Binance failed to provide appropriate disclosure regarding the risk and legality of the tokens trading on its international and US platforms.
Related: Binance subsidiary Tokocrypto secures full license in Indonesia
SEC’s apparent contradictions
Amid the ongoing lawsuit with Kraken, the SEC has come under scrutiny after admitting that “crypto asset security” is a “made-up term,” as highlighted by Stuart Alderoty, chief legal officer at Ripple.
Alderoty mocked the regulatory entity for its “twisted pretzel of contradictions” prompted by Footnote 6 of the amended complaint against Binance, stating the regulator “regrets any confusion it may have invited.”
Source: Paul Grewal
Paul Grewal, chief legal officer at Coinbase, highlighted the regulator’s claim that “XRP itself is a security” in the 2020 Ripple et al. lawsuit and asked the SEC, “Why mislead the Court?”
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