Solana (SOL) is listed among 60 cryptocurrencies that SEC considers to be securities.
The Solana Foundation has recently refuted the US Securities and Exchange Commission's (SEC) claims that its native cryptocurrency, Solana (SOL), is a security.
On June 10th, the company behind the Solana ecosystem took to Twitter to comment on the classification, which was labeled in lawsuits against Binance and Coinbase. This classification is grounded on several considerations, such as the anticipated profits resulting from the endeavors of others and the usage and promotion of these tokens.
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According to SEC guidelines, a "security" encompasses an "investment contract" and other financial instruments like stocks, bonds, and transferable shares.
In relation to digital assets, the regulator advises that each cryptocurrency should be evaluated to discern whether it embodies any product falling under the 'security' definition as per federal securities laws.
In this statement, the Foundation expressed its openness towards dialogue with policymakers to achieve legal clarity in the digital currency space.
The SEC added several cryptocurrencies into its securities classification following the lawsuits against Binance and Coinbase, namely Binance USD (BUSD), BNB, Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Axie Infinity (AXS), and COTI (COTI). Overall, SEC has a list of over 60 cryptocurrencies that it considers securities.
Regarding the current situation, Matt Levine, a legal expert and contributor at Bloomberg, opined that previous securities offerings of SOL should not define the token as a security now. He commented:
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.
Launched in March 2020, the utility token of Solana, SOL, has a few practical applications. SOL token owners partake in the validation of transactions via staking their tokens in the consensus mechanism. Furthermore, SOL can be used for rewards, settling transaction charges, and enabling governance participation.
The ongoing debate between the Solana Foundation and the SEC over the classification of SOL as a security underlines the ongoing struggle for clarity in the regulation of the crypto space.
