- The Solana Foundation stated that it disagreed with the SEC’s labeling of its token as a security.
- Bloomberg columnist states that Solana might not be completely at fault.
PATNA (CoinChapter.com) — The Solana Foundation finally broke its silence on the US Securities and Exchange Commission labeling its native token SOL as an unregistered security.
In a Twitter post, the team behind the Solana blockchain network straightaway denied the SEC’s charges. However, the Foundation stated it welcomed the opportunity to work with policymakers “on regulation to achieve legal clarity on these issues.”
The SEC had listed SOL as an unregistered security along with several other crypto tokens in its lawsuit against crypto exchanges Binance and Coinbase. The fallout of the allegation resulted in Robinhood delisting SOL, along with MATIC and ADA, from its platform, citing an “internal review.”
Moreover, the Solana team promised the community that it remained dedicated to “protecting and nurturing the ecosystem.”
Also Read: Polygon Responds To SEC And Robinhood, Promises New Announcements Soon
Solana stated that it was working with legal experts to explore options. Furthermore, the blockchain platform communicated with the SEC to “understand and address their concerns.“
Might Not Be Solana’s Fault?
Bloomberg contributor Matt Levine noted that while the SEC explicitly mentioned that SOL was a security, it refrained from going after the token directly.
Levine surmised the reason could be a combination of the token’s decentralization (don’t know who to sue), the platform following best practices, or that the tokens were not issued in “illegal securities offerings.”
Moreover, the economist noted that Solana’s securities offering of SOL tokens to VC firms was legal. The blockchain platform ensured that the private placements were subject to appropriate SAFTs and lockups.
The fact that those tokens now trade publicly, with less disclosure and fewer investor safeguards than the SEC would like, is, from the SEC’s perspective, unfortunate. But it’s not exactly Solana’s fault, or rather it is Solana’s fault but in a perfectly legal way.
Matt Levine noted.
Moreover, the former investor banker observed that when crypto projects raised money using tokens, they became security offerings. However, the tokens themselves were not securities.
“Once the project is built and running, the tokens are something else. They are utility tokens, currencies, commodities, air miles, Starbucks gift cards, whatever, not securities“
However, not everyone is an SOL supporter, with one lawyer on Twitter asking the platform to “go to law school and study securities law before saying things like this.”
Shane Plumer was replying to the Solana Foundation tweet regarding the SEC’s allegations. Plumer opined that the issue wasn’t if SOL was a security or not (claiming it was). Rather, the issue was that the SEC had alleged SOL and others were unregistered securities.
Meanwhile, the SOL token price action was volatile on June 11, with the Solana token spiking nearly 7% to form a daily high near $16.2 before paring gains. At writing, the token was trading at $15.65.
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