Solana, Cardano, and Polygon reject SEC’s ‘Security’ classification.
A group consisting of Solana, Cardano, and Polygon have joined forces in order to challenge the Securities and Exchange Commission’s (SEC) classification of their cryptocurrencies as securities.
The projects are seeking regulatory clarity that enables innovation while also protecting consumers’ interests as lawsuits continue against major exchanges Binance and Coinbase.
The Solana Foundation spokesperson stated, “Our token is non-security, and we urge regulators to collaborate for clear regulations that strike a balance between innovation and consumer protection.”
Solana, Cardano, and Polygon Challenge SEC’s ‘Security’ Label, Advocate for Regulatory Clarity
Despite the SEC’s claims, Solana (SOL), Polygon (MATIC), and Cardano (ADA) are challenging the recent classification of their cryptocurrencies as securities.
The SEC included these tokens, among others, as examples of allegedly non-compliant assets traded on major crypto exchanges, leading to lawsuits against Binance and Coinbase. Their prices have notably dropped as a result.
With a combined market capitalization exceeding $21 billion, these tokens hold significant industry standing, rivaling even Ethereum (ETH).
Cardano, Solana Defend Regulatory Statuses of their Tokens
Cardano and Solana, supported by their respective organizations, have staunchly defended the regulatory status of their tokens in response to the SEC’s claims.
Input Output Global (IOG), the firm behind Cardano, maintains that ADA has never been considered a security under U.S. law.
Similarly, the Switzerland-based Solana Foundation voiced its disagreement with characterizing Solana as a security on Twitter.
The foundation also emphasized its commitment to working with regulators and the necessity for clear regulatory guidelines in the digital asset space.
However, there have been discussions within the Solana community about potentially forking the network to address regulatory concerns and mitigate the impact of potential market flooding resulting from FTX’s bankruptcy.
Solana Community Contemplates Network Forking
The idea of forking the Solana network has gained traction, with proponents citing Ethereum’s successful fork following The DAO hack in 2016.
Such a fork could potentially resolve regulatory challenges and mitigate the effects of a significant number of Solana tokens owned by Alameda Research, the trading firm of former FTX CEO Sam Bankman-Fried, flooding the market in the coming years.
Despite the ongoing debates within the Solana community, blockchain networks continue to face challenges in navigating regulatory frameworks. However, crypto ecosystems remain resolute in their mission to defend their positions and shape the future of the cryptocurrency industry.