The SEC has declared the SOL token to be a security in two distinct cases brought on June 5 and June 6 against cryptocurrency exchanges Binance and Coinbase.
The Solana Foundation has finally spoken up over the SEC’s recent decision to classify Solana (SOL) and other cryptocurrencies as securities. The business recently tweeted that it does not agree with the market regulator.
In a statement, the Solana Foundation expressed its appreciation for the efforts made by politicians to collaborate as “constructive partners.” On regulation, to make the law more clear for the thousands of American companies trying to expand the market for digital assets.
The company also claimed that its developer community is the best in the digital currency industry and remains firmly dedicated to developing game-changing innovations.
The letter from the Solana Foundation is for the members’ consolation. However, it also highlights the group’s dedication to supporting “those building for the long haul to continue to create the best blockchain for a decentralized future.”
SOL was also listed as a security in the SEC’s recent action against Binance and Coinbase. Along with Filecoin (FIL), Cardano (ADA), and Polygon (MATIC), among others. Nevertheless, it appears that the Solana Foundation has not yet been sued.
Despite the message’s declared objective of reducing tensions, the Solana Foundation’s attempt to reassure its members came rather later. The SEC’s crackdown is already having an impact.
Additionally, it was also disclosed that cryptocurrency exchange Robinhood Markets Inc. will discontinue supporting Solano, Cardano, and Polygon at the end of the month. On SOL, this modification has had a big impact. Furthermore, the majority of other cryptocurrencies are contributing to the present downward trend.
The native and utility tokens for Solana went live in March 2020. By using its consensus method, SOL holders stake the token to confirm transactions. The coin also enables users to take part in governance, collect awards, and pay transaction fees.
The SEC states that a “security” is any financial instrument, including stocks, bonds, and transferable shares, as well as an “investment contract.” The regulator’s instructions for evaluating digital assets as investment contracts specify that “a digital asset should be analyzed to figure out how well it has features of any product that satisfy the definition of “security” under the federal securities laws.”
In previous years, the Solana Foundation conducted private token sales, which implies that it offered institutional investors and venture capital firms securities.
According to reports, its private sales were carried out via a simple agreement for future tokens (SAFT), a security issue for the future transfer of digital tokens from cryptocurrency developers to investors.
Investors were subject to lockups under token sales conducted through a SAFT, and Solana also submitted private offering documents to the SEC.