After speculation this summer that the U.S. Securities and Exchange Commission (SEC) might wind down its war on altcoins like Solana, the financial regulator has now signaled that it fully intends to proceed with claims that selling the token constitutes an illegal, unregistered security offering. 

In an amended complaint submitted this week in its suit against Binance, the SEC took steps to remove controversial language describing tokens as “crypto asset securities”—but kept, and even elaborated on, arguments that crypto exchanges violated the law by allowing customers to buy and sell SOL. 

“The Solana Foundation described the announcement of trading with U.S.-based exchanges as an opportunity to increase the value of SOL and its ‘ecosystem,’” the SEC’s lawyers wrote this week in new language added to the Binance complaint. 

“The information Solana Labs and the Solana Foundation publicly disseminated has led SOL holders, including those who have purchased SOL on the Binance Platforms, to view SOL as an investment in, and reasonably to expect to profit from, Solana Labs’ and the Solana Foundation’s efforts to grow the Solana protocol, which, in turn, would increase demand for and the value of SOL,” lawyers for the SEC argued. 

Securities are defined in part as assets that create passive profits for investors thanks to the active efforts of others. 

In late July, the SEC signaled that it was considering amending its case against Binance to shelve certain language related to “third party crypto assets,” including Solana, Cardano, and Polygon. At the time, some crypto legal experts celebrated the news, taking it as a sign that the SEC was on the backfoot, narrowing its case against Binance to a smaller group of cryptocurrencies.

Other legal experts advised caution, chalking up the development to a minor clerical move that likely revealed little about the SEC’s legal strategy. 

Those latter voices appear to have been vindicated this week—at least in part. The SEC, while stopping short of arguing crypto tokens themselves are securities, doubled down in its claims that Solana, Cardano, Polygon, and seven other crypto assets were "offered and sold” as securities. As such, the SEC alleges that Binance violated the law when it allowed its customers to trade these assets.

That position is consistent with accusations the SEC made last week when it sued Cumberland, a Chicago-based crypto trading firm. In that suit, the regulator is claiming that Cumberland violated securities laws by offering trades on Solana and Polygon, among other crypto tokens.

The SEC first sued Binance back in June 2023, arguing that the company acted in “blatant disregard of the federal securities laws” and investor and market protections while operating as an unregistered exchange, broker, and clearing agency. It seeks to permanently bar Binance from participating in those activities without registering with the agency, and to compel the company to both disgorge all “ill-gotten gains” related to the activity in question and pay civil money penalties.  

The SEC’s aggressive stance on crypto projects and exchanges has become a prominent talking point in the 2024 U.S. presidential election. Both Vice President Kamala Harris and former president Donald Trump have said they would do more to protect the crypto industry if elected.

To some observers, such as billionaire entrepreneur Mark Cuban, this means that, regardless of the election’s outcome, SEC lawsuits against crypto companies like Binance could be reconsidered, in part or in whole, and that a change in leadership at the Commission may be imminent.