The Solana Foundation Has Claimed That SOL Is Not A Security

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SOL Solana
SOL

The Solana Foundation recently took to Twitter in order to address the United States Securities and Exchange Commission’s classification for Solana as a security. The statement from the 10th June read that the Solana Foundation was in complete disagreement with the characterization of this token as security, while noting that it welcomed the engagement of all the policymakers in order to achieve some form of legal clarity in the digital assets space.

The utility and native token of the company was launched in March 2020. Since then, the holders of SOL have been staking the token in order to validate some form of transactions through the consensus mechanism. The token could also be used in order to receive rewards, pay transaction fees, as well as enable the users to participate in some form of governance. 

SOL Token Shouldn’t Be Seen As Security- According To Solana

The SEC has already labeled the Solana token as a security in a bunch of separate lawsuits which was filed on the 5th and 6th June against crypto exchanges Coinbase and Binance. The classification has also been based on multiple factors, which includes the expectation of profits which was derived through the efforts of others, including how the tokens were marketed and used. In a letter the Foundation mentioned that the classification was quite significant because it subjected the cryptocurrency and the associated activities to a different set of compliant requirements and regulations. 

Along with Solana, the SEC has also listed nine different cryptocurrency to the securities’ classification on the lawsuit by Binance- Binance USD, BNB, Cardano, Solana, Polygon, The Sandbox, Cosmos, Axie Infinity, and COTI. According to the SEC, this term also includes an investment contract, which could be used to define other instruments such as bonds, stocks, and other transferable shares.