According to a final ruling issued by the Court of the Northern District of California, in the United States, the arguments of the Securities and Exchange Commission (SEC) gain strength, stating that tokens and cryptocurrencies are securities. For this reason, the bug becomes a threat to the cryptocurrency exchanges Binance and Coinbase.

The SEC reportedly accused defendants Crowd Machine and Metavine, as well as their founder Craig Sproule, of “selling tokens, classified as securities, without registration” with the regulatory body.

The ruling emerges as a new element in the battle that the SEC waged against Binance and Coinbase, and this is what Coinbase's legal director, Paul Grewal, who criticizes the ruling, seems to understand.

Citing Consensys advisor Bill Hughes' tweet about the latest SEC lawsuit, Grewal asked, "so the tokens themselves are once again securities?" The question arises in relation to the public hearing that took place last week before Judge Katherine Polk Failla, in a United States district court.

At the time, Coinbase lawyers were optimistic about the course the case was taking . This is because everyone present in the room agreed, including the legal representatives of the regulatory agency, that none of the 13 tokens cited in the SEC complaint were securities in themselves. During the public hearing, Patrick Costello, deputy chief of litigation at the SEC, argued that the tokens support a larger “enterprise,” making them similar to an investment contract.

“When the value of the network or ecosystem increases, the value of the (associated) token also increases,” Costello commented. And later, Failla told SEC lawyers that she was "concerned" because the agency was asking her to "broaden the definition of what a security truly represents."

The SEC then said that buyers of digital assets, including on secondary exchanges like Coinbase, were purchasing the tokens and cryptocurrencies as investments similar to stocks or bonds. But Coinbase's lawyers disagreed, pointing out that buyers of such tokens were not signing contracts entitling them to the revenues of a common company.

Cryptocurrencies at the center of the legal battle

Now, Paul Grewal is concerned and questions whether the arguments made by Coinbase at last week's public hearing are being interpreted as “false.” However, Grewal makes it clear that the Crowd Machine and Metavine defendants were “scammers,” though he adds that the fact that they are does not provide a license for the regulatory agency to “make false statements in federal court.” Grewal adds that such “false statements” could leave Americans even more confused about cryptocurrency regulation. “The SEC has gotten worse about what it really believes is the law,” he noted.

The SEC sued Coinbase last June, saying that the company facilitated the trading of at least 13 cryptocurrencies, including Solana, Cardano and Polygon, which had to be registered as securities. Since then, the regulatory agency and the American cryptocurrency exchange have been engaged in a legal battle. The case is also part of a series of lawsuits that the SEC has filed against other companies in the cryptocurrency sector. Previously, the agency focused on companies selling digital tokens, but under the leadership of president Gary Gensler it has focused more on exchanges and trading platforms with clearing activities that act as broker-dealers.

Now, there are doubts that the American justice system can dismiss the lawsuits filed by the SEC against Coinbase, Binance and other companies.

This considering that currently in some trials it is agreed to deepen the search for elements that demonstrate that cryptocurrencies are not securities , while in others a sentence is already being handed down, giving strength to the arguments of the regulatory agency, which in turn becomes a threat to exchanges that advance their litigation.