The US Securities and Exchange Commission (SEC) has filed a lawsuit against the world's largest cryptocurrency exchange Binance and its CEO, Changpeng Zhao, for allegedly selling unregistered securities to US investors.
The SEC claimed that the 10 altcoins listed on Binance are securities under US law and that Binance did not register them or seek an exemption. The altcoins in question are Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS) and Coti (COTI).
Why Ripple (XRP) Wasn't Mentioned in Binance Litigation
However, one notable shortcoming in the SEC's lawsuit was Ripple (XRP), which has been facing a similar lawsuit from the SEC since December 2020.
Why did the SEC exclude XRP in its lawsuit against Binance? Eleanor Terrett, a cryptocurrency journalist, shared some possible reasons she got from her legal sources:
- The SEC wants to avoid inconsistent decisions. If the SEC sues Binance over XRP, it could contradict its own arguments in the Ripple case or confuse the courts.
- XRP is currently being sued and referenced in other lawsuits. The SEC may not want to complicate the ongoing litigation with Ripple and other parties by adding XRP to the Binance litigation and causing potential research issues.
- If Ripple wins, the SEC's lawsuit against Binance will weaken. The SEC may not want to risk losing credibility and public support by suing Binance for XRP if Ripple wins in its case and proves that XRP is not a security.
*Not investment advice.