Solana in the Spotlight: SEC’s Legal Maneuver and Market Implications

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The SEC’s recent decision to withdraw its request to classify Solana (SOL) as a security in its lawsuit against Binance has sparked confusion. Despite this move, industry insiders, including Jake Chervinsky from Variant Fund, argue there’s no reason to believe the SEC has shifted its position on Solana. 

With SEC updates and possible ETF on the horizon, will SOL regain its bullish rhythm?

Dive in!

SEC’s Crypto Politics

Jake Chervinsky, chief legal officer at Variant Fund, stated on X, that there is no indication the SEC now considers Solana a non-security. He noted that the SEC’s recent court filing, which no longer seeks a verdict on the security status of certain tokens, has led some to believe the regulator is softening its stance. However, Chervinsky and other crypto insiders argue that this interpretation is likely incorrect.

Misinterpreting the Filing?

Miles Jennings from a16z Crypto and Justin Slaughter from Paradigm concur that many are overinterpreting the SEC’s filing. Slaughter emphasized that the filing does not imply the SEC has decided Solana and other tokens are not securities. Jennings highlighted that the SEC faces significant challenges in proving these tokens are securities under the Howey test, especially in the Binance case. 

Meanwhile, Judge Katherine Polk Failla in the Coinbase lawsuit appears more supportive of the SEC’s position.

SOL’s Performance

Post the news, Solana’s price dropped by 5% to about $182 on a day when the entire crypto market fell by nearly 3%. However, SOL has gained 5% over the past week and 25% over the past month. Despite a surge that briefly pushed Solana to 4th rank by market cap last week, its rank has slipped back to 5th. However, overall it’s up an impressive 670% over the last year.

What’s Next for Crypto?

The SEC’s suit against Binance initially claimed several tokens were securities, including Solana, BNB, Cardano (ADA), Polygon (MATIC), The Sandbox (SAND), Decentraland (MANA), and Axie Infinity (AXS). These tokens, along with others the SEC has identified as securities, represent a significant portion of the cryptocurrency market, affecting over $100 billion worth of assets.

The SEC continues to refer to these tokens as securities in other lawsuits, including one against Coinbase. This inconsistency keeps the crypto community in confusion. For now, Solana, BNB (BNB-USD), and others remain under scrutiny.