The Securities and Exchange Commission (SEC) has recently claimed that Solana (SOL), Polygon (MATIC), and Cardano (ADA) are securities. This allegation came amidst lawsuits against Binance and Coinbase, accusing the non-compliant crypto exchanges of offering and trading these tokens. Combined, SOL, MATIC, and ADA have a market capitalization of over $21 billion. Over the past seven days, the trio of tokens has seen a price decline of around 30% each.
Cardano was the first to defend its regulatory status, with its founding organization, Input Output Global (IOG), stating that ADA has never been a security under U.S. securities law. IOG also emphasized that the SEC’s latest lawsuits will not impact the company’s operations and that they welcome a collaborative approach with regulators to foster innovation while protecting consumers.
On the other hand, the non-profit Solana Foundation, based in Switzerland, did not outright assert that Solana is not a security. Instead, they expressed disagreement with the SEC’s characterization of SOL as a security. The organization also underscored its commitment to working with regulators, emphasizing that “regulatory clarity” is a crucial issue impacting all those building in the digital assets space in the U.S.
In response to the SEC’s allegations, community members of Solana are contemplating the possibility of forking the network. Such an action could mirror what Ethereum did after The DAO hack in 2016, creating a new network and potentially bypassing the SEC’s issue.
Polygon Labs, the company behind Polygon, did not explicitly claim that its Ethereum scaling solution’s token is not a security, nor did it directly address the SEC. Instead, it highlighted that Polygon was developed and deployed outside of the U.S. and emphasized MATIC’s utility in securing its network. Additionally, the company said that it conducted its operations without targeting the U.S., possibly laying the groundwork for a legal argument over regulatory jurisdiction on MATIC.
Since the SEC’s actions against Binance and Coinbase, trading app Robinhood has decided to end support for Solana, Polygon, and Cardano. They explained that these lawsuits have “cast a cloud of uncertainty” around the cryptocurrencies. While other companies may follow suit, each coin’s respective organization is working diligently to clear its currency’s name in the meantime.
Source: Decrypt
