In what could be a major setback for cryptocurrency ecosystem, the developers of Solana (SOL) are caught in legal crosshairs. The recent crisis around crypto credit environment is already proving to be costly for the crypto and blockchain community.
‘SOL Tokens Unregistered Securities’
Mark Young, a California based SOL investor filed a lawsuit against the Solana developers, claiming that the tokens are ‘unregistered securities‘. The lawsuit claims Solana Labs, the Solana Foundation and Anatoly Yakovenko, co-founder of the project as defendants. The plaintiff’s argues that the Solana developers violated U.S. securities laws in sale of the SOL securities.
“Defendants made enormous profits through the sale of SOL securities to retail investors in the United States. This is in violation of the registration provisions of federal and state securities laws. And the investors have suffered enormous losses.”
Last month, Senators Cynthia Lummis and Kirsten Gillibrand unveiled the Responsible Financial Innovation Act, which talks about the regulatory ambit of crypto assets. The draft bill calls for bringing crypto under purview of the Commodity Futures Trading Commission (CFTC), rather than the Securities and Exchange Commission (SEC).
‘Misleading Statements About Solana Total Supply’
The lawsuit claims that the Solana developers deliberately made misleading statements about the total circulating supply of SOL securities. The Solana initial coin offering in April 2020 gave the developers funds to promote SOL project, it said. “As a result of these promotional efforts, SOL securities reached a peak price of $258 per token, with a market capitalization of more than $77 billion, on November 5, 2021.”
