According to ChainCatcher, Paul Grewal, chief legal officer of Coinbase, disclosed that footnote No. 6 of the amended complaint filed by the U.S. Securities and Exchange Commission (SEC) against Binance shows: “As this court points out and the SEC reiterates, when the SEC uses the term “crypto asset securities,” it does not mean that the crypto assets themselves are securities; on the contrary, as the SEC has consistently insisted since the first crypto asset Howey case, the term is just a shorthand.
See Telegram (“While helpful as a shorthand reference, the security in this case is not simply the cryptoasset, which is little more than an alphanumeric code sequence… The security in this case consists of the entire contract, expectations, and understandings surrounding the sale and distribution of the cryptoasset.”).
However, to avoid any confusion, the amended complaint no longer uses this abbreviated term, and the SEC regrets the confusion it may cause.
As the court explained, crypto assets are the subject matter of investment contracts. The defendants appear to argue that even though the ten crypto assets were issued and sold as securities during the ICO, they did not remain securities forever. The SEC did not make this argument. The SEC’s allegation with respect to the ten crypto assets involved in the secondary market is that their promotion and economic substance did not undergo any substantial change under the Howey standard, and therefore they were still issued and sold as investment contracts.
