Ripple execs denounce SEC over its plan to amend its complaint against Binance, says it adds to confusion

Ripple executives criticized the U.S. Securities and Exchange Commission's handling of cases it brings against the crypto industry.

The SEC said on Tuesday that it plans to change its complaint against crypto exchange Binance regarding "Third Party Crypto Asset Securities," specifically SOL, ADA, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI, according to a court filing.

The SEC has brought several cases against crypto firms over the past year or so, focused on platforms that they say need to be registered while also classifying some cryptocurrencies as securities. The agency sued Binance Holdings and its former CEO Changpeng Zhao last year, accusing the crypto exchange of lying to customers, failing to restrict U.S. investors from accessing Binance.com, misdirecting capital to separated investment funds owned by Zhao, and operating as an unregistered exchange.

The SEC also sued crypto exchange Coinbase last year for allegedly operating as an unregistered exchange, broker and clearing agency. In that case, the SEC said SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO were "crypto asset securities."

"When a judge signals B.S. on the SEC’s claim that 10 tokens on Binance are securities, the SEC says 'never mind,'" said Stuart Alderoty, Ripple's chief legal officer, in a post on X. "But these tokens are left out to dry in the Coinbase suit. This isn’t how to regulate."

Ripple CEO Brad Garlinghouse called the amended Binance complaint "hypocrisy."

"Chair Gensler testifies the rules are clear, yet his SEC can't figure them out and applies them haphazardly, festering more industry confusion," Garlinghouse said in a post on X.

The SEC and Ripple have been battling in court for years after the SEC accused the firm of raising $1.3 billion through the sale of XRP, which it says is an unregistered security. Last year, Judge Analisa Torres of New York ruled that some of Ripple’s sales, called programmatic, of XRP, did not violate securities laws because of a blind bid process in place for them. She did, however, rule that other direct sales of the token to institutional investors were securities.

SEC Chair Gary Gensler, meanwhile, has repeatedly said crypto platforms need to register and has said most cryptocurrencies are securities.

Other takes

Justin Slaughter, policy director at Paradigm, said some may be overreading the filing and that the SEC could still take the stance that those tokens are securities in other cases. The judge in the Binance case signaled that she was "likely to find that the tokens were all not securities at all times," Slaughter said in a post on X.

"So rather than take another bad loss on the beware of their approach, they’re backing down," Slaughter said. "But so far they’re only backing down here. There’s no sign yet that they’re making a similar filing in the Coinbase case in New York which went less bad for the SEC."