blockworks.co
Howdy!
Last night, I walked past an ambulance that belonged to some sort of ambulance startup named, I kid you not, “Ambulnz.”
I get it, there are a lot of companies. They can’t all have top-shelf names. But for your own sake, if you’re naming a startup, just use real words with spellings that are clear to pronounce. Anyways:
No, the SEC didn’t say SOL isn’t a security
On Tuesday, a new filing in the SEC v. Binance case revealed that the SEC intends to drop its allegation that a host of Binance-listed tokens including SOL are securities, meaning the court would not need to issue a ruling on whether SOL is a security.
The SEC initially brought 13 charges against Binance last summer, alleging that the stateless crypto exchange violated a host of securities laws in the US, its listing of SOL and other alleged securities being one of the alleged misdeeds. SOL tokens being securities is a legal classification that could determine how easily US-based investors can access the asset — but SOL’s standing is currently up in the air as the SEC mostly continues its “regulation by enforcement” approach to crypto.
After the case amendment dropped, claims quickly spread on social media that the SEC no longer defines SOL as a security. That’s probably not true, legal experts say. More likely, the SEC is making a strategic move in its litigation against Binance.
“I wouldn’t get too excited,” Jordan Teague, partner at the law firm Campbell Teague, said in a direct message when I asked her about the update to the Binance case.
The SEC likely hasn’t changed its view that SOL is a security, since it makes the same claim in its ongoing suit against Coinbase, Teague explained. Rather, the SEC may have decided that not arguing about SOL’s legal status would be beneficial to its litigation strategy in this particular case.
Teague cited a few reasons why dropping the unregistered security allegation could be beneficial to the SEC’s Binance case: “because it does not want to deal with the third party discovery that would be required to prove the allegation; because it thinks it stands a better chance of winning on the issue in the Coinbase suit; or because it does not want to risk a circuit split (given that the Binance suit is in the Second Circuit and the Coinbase suit is in the DC Circuit).”
Other crypto industry lawyers appear to generally agree with Teague’s take.
“There is no reason to think SEC has decided SOL is a non-security,” Variant Fund chief legal officer Jake Chervinsky wrote on X, adding that the SEC made a tactical choice not to go through discovery, which is the information-gathering phase before a trial begins, on ten tokens.
Paradigm policy director Justin Slaughter said the SEC may be reeling from a worse-than-expected outcome in Binance’s motion to dismiss the case, saying “rather than take another bad loss on the beware of their approach, [the SEC is] backing down … [b]ut so far they’re only backing down here. There’s no sign yet that they’re making a similar filing in the Coinbase case.”
With the allegation that SOL is a security still standing in the Coinbase case, SOL’s status remains in limbo. If the Coinbase suit gets similarly amended, then it may be time for investors to pop open some champagne bottles.
But if SOL is ever deemed a security by the SEC, that could pose a major threat to the ecosystem’s viability, as venues for selling the tokens in the US could be guilty of selling unregistered securities.
But even an unfavorable ruling in the Coinbase case might not spell the end for SOL, Teague explained. Importantly, any potential ruling is not binding on Solana itself, as the network isn’t party to the lawsuit. Plus, the case is being argued in a circuit court, meaning that a potential ruling wouldn’t be binding for courts in other circuits, and the Supreme Court may end up needing to resolve the matter.
On top of this, the US crypto industry likely wouldn’t let a host of altcoins including SOL face delistings without a fight.
“We have seen major exchanges—both centralized and decentralized—willing to go to the mat with the SEC because they understand that these are existential issues for crypto and a permissionless future,” Teague wrote.
— Jack Kubinec
Zero In (1 data point, 1 chart, and context – 100)
SOL’s price run lost steam as the calendar flipped the page to August.
The token is down 9.7% over the past 24 hours, according to CoinGecko, trading at around $162 after rising as high as $193 on Monday.
Cryptoassets are down across the board today despite Fed Chair Jerome Powell opening the door for a September interest rate cut, which would theoretically be bullish for cryptos.
SOL is still up roughly 10% over a 30-day time horizon.
— Jack Kubinec
The Pulse
What the heck is going on with Scottie Pippen? The basketball legend recently took to social media to promote his new venture: the tokenization of the iconic basketball from the 1991 Game 5 NBA Finals. The project aims to blend sports history with blockchain technology, offering fans fractional ownership of the real-world asset (RWA).
Pippen’s announcement included a number of bizarre posts, including AI images of himself cuddling in bed with the ball, driving in a car with it seat-belted into the passenger seat, and showering with the ball (while still wearing his jersey of course). He capped off the posts with a brief retelling of a (truly bonkers) dream involving Bitcoin creator Satoshi Nakamoto’s supposed endorsement of the project.
Celebrity involvement in crypto has long been fraught with failure. Recent celebrity memecoins —like Caitlyn Jenner’s JENNER and Iggy Azalea’s MOTHER— saw dramatic rises followed by crashes, leaving investors with nearly universal losses.
The social response to Pippen’s project has been overwhelmingly negative, especially from Solana users, with many noting its cringey approach. Helius CEO @0xMert_ captured the sentiment of many with a simple, “What the fuck.” @Evan_ss6 said, “So glad it’s not on Solana,” while @validator_com sarcastically commented, “Ah yes, because if there’s one thing Satoshi Nakamoto loves, it’s basketball crossovers, RWAs and life advice from dreams.” @LitecoinRicky remarked, “I thought football players got CTE not NBA players,” while @HouseofYogiX joked, “At least it’s not a pump fun.” @ColtynSeifert bluntly speculated, “Dude has lost his mind,” and @solostakers questioned, “Is this a joke!? 😲 These celeb projects are getting crazier.”
@mshodl asked, “Omg, what in the name of cringe did I just read,” while @rot13maxi begged, “please stop posting top signals. It’s too early for this.” @AlexFinnX questioned the authenticity, posting “is this real or were you hacked? There’s no way one of the greatest NBA players of all time is doing this.” Others like @boldleonidas criticized Pippen’s perceived lack of genuine understanding of the crypto space, saying “This is the epitome of what an outsider thinks would be successful in crypto.” @btc_overflow added, “Someone please tell the real Scottie Pippen that this payday is not worth the reputational damage…”
— Jeffrey Albus
One Good DM
A message from Tom Momberg, attorney at DLx Law:
