SEC vs. Binance: US Exchanges Forced to Delist Popular Crypto Assets

• On June 5, 2023, the U.S. Securities and Exchange Commission (SEC) filed a complaint against Binance Holdings Ltd., BAM Trading Services Inc., and its founder Changpeng Zhao for alleged violations of security laws.
• The complaint listed ten crypto assets as unregistered securities, including BNB (BNB), BUSD (BUSD), SOL (Solana), ADA (Cardano), MATIC (Polygon), ATOM (Cosmos), SAND (The Sandbox), MANA (Decentraland), AXS (Axie Infinity) and COTI (COTI).
• This puts pressure on U.S.-based exchanges to delist these assets or face potential enforcement action from the SEC.

SEC Takes Aim at Crypto Exchanges

The U.S. SEC has ramped up its enforcement efforts in the crypto space this year with actions against Gemini, Genesis, Kraken, Beaxy, Bittrex and most recently Binance.

Popular Tokens Face Delisting Risk

The SEC’s complaint listed ten crypto assets as unregistered securities including popular tokens such as ADA, SOL and MATIC. This puts significant pressure on U.S.-based exchanges to decide whether to prioritize compliance over their trading volumes or risk facing enforcement action from the SEC.

Prior History of XRP Delisting

In 2021 many US-based exchanges stopped supporting XRP for similar reasons which shows how serious the regulations can be when it comes to delisting tokens that have been deemed securities by the SEC without proper registration procedures being followed.

Industry Reacts To SEC Action

The possible delisting of these popular tokens has caused a stir among industry experts with some believing that it is an overly harsh reaction while others are arguing that it is necessary in order to ensure regulatory compliance in the US crypto markets.

The recent enforcement action taken by the SEC against Binance puts significant pressure on US-based exchanges to delist certain tokens deemed unregistered securities or risk facing potential legal consequences from financial regulators.