SOL, MATIC, ADA Disagree With SEC’s Securities Allegations
- The Solana Foundation, Polygon Labs, and Input Output Global (IOG) all made public statements over the past few days, claiming that their tokens were not securities.
- The U.S. SEC filed lawsuits against Binance and Coinbase last week, claiming they had offered unregistered securities on their platforms, and naming 16 digital assets as securities.
U.S. Securities and Exchange Commission building, Washington DC, USA, 25 June 2018. Shutterstock
Over the past few days the developers of Solana (SOL), Polygon (MATIC), and Cardano (ADA) have hit back against the Securities and Exchange Commission’s (SEC) allegation that their tokens were securities.
Last week, the U.S. securities regulator filed a lawsuit against crypto exchanges Binance and Coinbase alleging that they had offered unregistered securities on their platforms, naming 16 different tokens as securities in its complaint. Amongst those tokens were SOL, MATIC, and ADA, the developers of which all came out in the past few days to refute the SEC’s allegations that these assets were securities.
The Solana Foundation took to Twitter on Saturday, stating that it “disagrees with the characterization of SOL as a security”, and that it welcomes the continued engagement of policymakers to “achieve legal clarity on these issues”. In a letter to its community, the Solana Foundation said it was “actively engaging with legal experts” and is communicating with the SEC in order to understand and address their concerns.
Polygon Labs also made a statement via Twitter on Sunday, noting that MATIC was “developed outside the U.S., deployed outside the U.S.”, and that to this day the token was focused on its global community. The developer further said that the token was a necessary part of its technology, and that it “did not target the U.S. at any time”.
Cardano developer Input Output Global (IOG) responded to the SEC’s allegation only a day after the lawsuit against Coinbase was filed, noting in its blog post that “under no circumstances is ADA a security under U.S. securities laws”. The company further said that the filing “contains numerous factual inaccuracies” regarding the ADA token.
The prices of all three of these tokens were heavily impacted by the SEC’s allegations, losing close to 30% of their value over the last 7 days. There was also a sudden sell-off over the weekend, but since the start of the week the prices of the tokens seem to have stabilized, and over the past 24 hours ADA experienced gains of 7.2%, while MATIC rose by 5.5%.
- During an interview with FT, CEO Brian Armstrong said that before the lawsuit a SEC staff member had said that all crypto except BTC was security, and should be delisted.
- When asked how he came to that conclusion, the SEC staff member reportedly said “we’re not going to explain it to you, you need to delist every asset other that Bitcoin”.
Coinbase CEO Brian Armstrong appears on stage at the 2014 TechCrunch Disrupt Europe/London, at The Old Billingsgate on October 21, 2014 in London, England. Anthony Harvey/Getty Images for TechCrunch
- A federal judge ruled that the sale of XRP through exchanges and algorithms did not qualify as selling securities, which could have a major impact on several SEC lawsuits.
- The institutional sale of the token, however, did violate federal securities laws, and the lawsuit between the SEC and Ripple will have to go to trial.
- Binance had filed a complaint against a 17 June SEC press release, claiming that the regulator had made “misleading” statements that could have tainted the jury pool.
- The presiding judge rejected the complaint by saying that it was not the court’s mandate to “wordsmith” public statements, and that it was not clear if the statements had any effect on the case.