Cardano And Solana Counterattack Against SEC's Classification Of Cryptocurrencies As Securities

Zinger Key Points
  • IOG refutes SEC's claims that ADA is a security.
  • Company calls for more informed and constructive regulation.

IOG, the company behind the development of Cardano ADA/USD, and the Solana Foundation SOL/USD, have rebutted claims by the U.S. Securities and Exchange Commission (SEC) suggesting that their native tokens could be classified as a security.

This comes in the wake of the SEC's legal action against prominent cryptocurrency exchanges Binance and Coinbase earlier this week, wherein ADA was named among other crypto tokens that the SEC considers as securities.

In a statement released on Friday, IOG stated, “Under no circumstances is ADA security under U.S. securities laws. It never has been.”

The company also emphasized the importance of understanding the mechanisms of decentralized blockchains as a crucial aspect of formulating judicious regulations.

IOG further criticized the approach of regulating through enforcement actions, indicating that this method lacks the transparency and certainty necessary for both the blockchain ecosystem and its users.

Also Read: Crypto Can't Dodge The Law With Fancy Talk, Says SEC's Gary Gensler

Meanwhile, the SEC’s allegations cast a shadow on the cryptocurrency market, with ADA witnessing a decline of 3% within 24 hours.

The market appears to be reacting to the heightened regulatory scrutiny.

In addition to ADA, the SEC has spotlighted tokens associated with Polygon MATIC/USD, Sandbox SAND/USD, Filecoin FIL/USD, Axie Infinity AXS/USD, Chiliz CHZ/USD, Flow FLOW/USD, Internet Computer ICP/USD, Near NEAR/USD, Voyager VGX/USD, Dash DASH/USD, and Nexo NEXO/USD as securities.

IOG’s statement not only defended its own token, but also highlighted a shared concern among blockchain developers and enthusiasts for a more informed and constructive regulatory framework.

Meanwhile, the Solana Foundation has disputed the classification of Sol being deemed as a security.

In a statement made to CoinDesk, the foundation stated, “SOL is not a security.”

It emphasized SOL’s integral role as the indigenous token of the Solana blockchain, which is an extensive, open-source initiative grounded in a decentralized network of users and developers, who collaboratively contribute to its growth and progression.

Read Next: Cryptocurrency Fraud Mitigation In Australia: Monthly Limit On Payments To Exchanges

Photo: Shutterstock

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Posted In: CryptocurrencyNewsSECMarketsBlockchaincrypto exchangecryptocurrency regulationIOGU.S. securities laws
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