Solana responds to SEC’s classification of SOL as a security

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Key Takeaways

  • SEC has included SOL in a lawsuit against Coinbase, stating that it should be treated as a security.
  • Solana stated that it welcomes the engagement of policymakers to achieve legal clarity in the digital assets space.

The Solana Foundation has taken to Twitter to address the recent classification of its native token, SOL, by the U.S. Securities and Exchange Commission (SEC) as a security. In a statement released on June 10, the Foundation expressed disagreement with this classification and extended a warm welcome to policymakers to help establish legal clarity in the realm of digital assets.

Solana’s statement comes amidst SEC classifying SOL as security in separate lawsuits filed against two major cryptocurrency exchanges, Binance and Coinbase, on June 5 and June 6, respectively. This classification was based on various factors, including the expectation of profits derived from the efforts of others and the manner in which the tokens are being utilized and marketed.

The Solana Foundation, in a letter addressed to its community, highlighted the significance of this classification, as it subjects Solana and associated activities to a different set of regulations and compliance requirements. 

“This classification is significant because it subjects Solana and associated activities to a different set of regulations and compliance requirements.We are actively engaging with legal experts and are in communication with the SEC to understand and address their concerns”.

In its response, the Foundation sparingly argued that the core mission of the Solana blockchain is to build exceptional products. Furthermore, the Foundation expressed surprise that the SEC specifically mentioned SOL in its regulatory actions.

The Foundation stated that it stands ready to engage with the regulatory agency to obtain regulatory clarity for operating within the United States. The Foundation believes that such clarity is vital for fostering innovation and growth in the digital asset space.

The SEC’s definition of “security” encompasses not only traditional instruments such as stocks, bonds, and transferable shares but also “investment contracts.” With its latest suits against Binance and Coinbase, the SEC has now labeled approximately 68 cryptocurrencies as securities, affecting more than $100 billion worth of tokens on the market.

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Saniya Raahath
Saniya Raahath

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