The Solana Foundation has responded to the United States Securities and Exchange Commission’s (SEC) classification of its native token, Solana (SOL), as a security. In a statement on June 10, the foundation expressed disagreement with the characterization and emphasized its commitment to engaging with policymakers to achieve legal clarity in the digital asset space.
Solana’s SOL token was launched publicly in March 2020 and is primarily used for transaction validation, receiving rewards, paying fees, and participating in governance. However, the SEC has included SOL in its securities classification in lawsuits against Binance and Coinbase, citing factors such as the expectation of profits derived from the efforts of others and the token’s usage and marketing.
The Solana Foundation recognizes the significance of this classification and the associated regulatory requirements. It stated that it is actively working with legal experts and communicating with the SEC to address their concerns. The SEC has also classified nine other cryptocurrencies as securities in the Binance lawsuit and added six more in the Coinbase lawsuit.
The SEC defines “security” to include “investment contracts” and analyzes digital assets to determine if they meet the definition under federal securities laws. While the Solana Foundation conducted private sales of tokens in the past, it asserts that previous securities offers should not automatically classify the SOL token as a security now.
Legal expert Matt Levine, in an opinion piece, argued that Solana’s token offerings were conducted in a legally compliant manner, and the subsequent public trading of the tokens should not retroactively change their classification as securities.
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