Kevin Helms
An Austrian economics student, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.
New lawsuit claims Solana’s unregistered security – ‘Investors have suffered huge losses’ – Altcoins Bitcoin News
A class action lawsuit has been filed claiming that the cryptocurrency solana (SOL) is an unregistered security during the Howey test. “The specific facts and circumstances surrounding SOL Securities support the conclusion that SOL is a security under the Howey test,” the plaintiff argued.
Solana is a security lawsuit
A lawsuit filed July 1 in the U.S. District Court for the Northern District of California claims that cryptocurrency solana (SOL) is an unregistered security. Principal Mark Young, a California resident and SOL investor, is suing on behalf of himself and all investors who purchased Solana tokens on March 24, 2020.
The defendants named in the lawsuit are Solana Labs Inc., Solana Foundation, Solana Labs CEO Anatoly Yakovenko, Multicoin Capital Management LLC, Kyle Samani and Falconx LLC. The lawsuit states:
Defendants made huge profits by selling SOL securities to retail investors in the United States, in violation of the registration provisions of federal and state securities laws, and the investors have suffered huge losses.
The lawsuit alleges that the defendants deliberately made false or misleading statements regarding Solana’s total circulating supply and its decentralized nature. It adds that Solana’s blockchain network is subject to “destructive interruptions” and network congestion.
The plaintiff claimed that Multicoin Capital Management and Kyle Samani “relentlessly promoted SOL securities, after buying them for $ 0.40 in 2019”. He then “loaded millions of dollars of SOL securities on retail investors” using OTC trading tables such as Falconx to act as a broker for the sale, he continued.
SOL is currently the ninth largest cryptocurrency by market value. At the time of writing, solana is trading at $ 36.83, down 7% over the last 30 days. SOL reached an all-time high of $ 260.07 in November last year, based on data from Bitcoin.com Markets.
Notes that on April 3, 2019, the US Securities and Exchange Commission (SEC) published a “Framework for ‘Investment Contract’ Analysis of Digital Assets,” the lawsuit states:
The specific facts and circumstances surrounding SOL securities support the conclusion that SOL is a security under the Howey test.
The plaintiff demands compensation for all damages caused as a result of the defendant’s offense and a declaration that solana is a security and that the defendant’s unregistered sale of SOL securities violated applicable laws.
Last month, a lawsuit was filed against Binance.us claiming that algorithmic stablecoin terrausd (UST) and cryptocurrency terra (LUNA) are both unregistered securities. In March, Coinbase was sued for selling 79 unregistered cryptocurrencies, including SOL.
SEC Chairman Gary Gensler has repeatedly said that many tokens are unregistered securities. Meanwhile, the regulator is still in an ongoing lawsuit with Ripple Labs and its executives over XRP, which the SEC views as an unregistered security.
What do you think about this lawsuit claiming that solana is a security? Let us know in the comments section below.
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