• The Solana Foundation has insisted that its native token SOL is “not a security” despite the Securities and Exchange Commission (SEC) claiming otherwise.
• The SEC had included SOL in its lawsuit against Coinbase, claiming it was being “offered and sold as an investment contract, and thus as a security”.
• Despite the lawsuit, the Solana Foundation remains firm on its stance that SOL is not a security.
Solana Foundation Insists SOL Is Not A Security
The Solana network’s native token SOL has been at the center of controversy recently with the Securities and Exchange Commission (SEC) claiming it was being offered and sold as an investment contract, and thus as a security. However, despite this claim by the SEC, the Solana Foundation has firmly stated that they believe their token to be sufficiently decentralized to not constitute a security for regulatory purposes. Furthermore, developers from Hacker House in New York City also stated their belief that regardless of whether or not it is seen as a security does not affect anyone building on top of Solana.
SEC Lawsuit Against Coinbase
SOL was one of 13 tokens named in SEC’s lawsuit against Coinbase which alleged that all these tokens were being offered and sold as investment contracts, and thus were securities. As news of this lawsuit broke out on Tuesday, there was an immediate impact felt on the price of SOL which fell heavily but since then have stabilized in $18-$19 range.
What Does This Mean?
This means that while there may be legal implications for users who are buying or selling investments through Coinbase regarding these 13 tokens including SOL, development will continue unimpeded on top of Solana blockchain given that SOL is still believed to be sufficiently decentralized to not constitute a security for regulatory purposes.
Stance Of Solana Foundation On Regulatory Status Of Its Token
Commenting on the regulatory status of its token to CoinDesk on Thursday, the Solana Foundation made it clear that it still sees Solana as sufficiently decentralized for its native token to not be considered a security for regulatory purposes stating: „The Solana Foundation strongly believes that SOL is not a security“. Furthermore developers from Hacker House in New York City stated: „SOL being a security doesn’t really affect anyone building on top of Solana“.
Conclusion
In conclusion while there are legal implications for users who are buying or selling investments through Coinbase regarding these 13 tokens including SOL due to their classification by SECas securities – development will continue unhindered given that they are still believed to be sufficiently decentralized to not constitute a security for regulatory purposes.