After XRP, Solana’s SOL categorized under unregistered security; Details

Sahana Kiran
Source – Unsplash

The crypto-verse is riddled with unexpected turns. From lawsuits to blatant accusations, the market has witnessed it all. Speaking of lawsuits, XRP continues to deal with the label “unregistered security” as the SEC Vs Ripple case persists. Looks like XRP has got some company as Solana’s SOL was recently accused of being unregistered security as well.

SOL investor Mark Young filed a suit in the California federal court recently. In the class-action suit, Young blames the founder and executives of the network for illegally benefitting from SOL. He further went on to accuse SOL of being an extensively centralized cryptocurrency. This aspect has in turn profited the makers of the asset while slashing investors’ portfolios.

The filling further read,

“Purchasers who bought SOL securities have invested money or given valuable services to a common enterprise, Solana. These purchasers have a reasonable expectation of profit based upon the efforts of the promoters, Solana Labs and the Solana Foundation, to build a blockchain network that will rival Bitcoin and Ethereum and become the accepted framework for transactions on the blockchain.”

All the defendants mentioned in the lawsuit were Solana Labs, Solana Foundation, Anatoly Yakovenko the CEO of Solana, Multicoin Capital Management, Kyle Samani Managing Partner at Multicoin as well as trading platform FalconX.

Furthermore, the case is overseen by Roche Freedman LLP. The same firm has been representing investors in a case against Binance.US.

Solana’s streak of outages highlighted in the lawsuit

The Solana network had about 12 outages throughout the year. This caused the network to be down for hours. Banking on the same, Young alleged that the network’s outages show that it’s highly centralized.

In addition to this, Young also noted that there were a plethora of sales of the SOL token ahead of the public sale of the asset. Multicoin and FalconX were dragged in for offloading and carrying out the offload of millions of dollars of SOL.

None of the defendants have released statements or publicly acknowledged the lawsuit. However, Solana investors sit tight and await the course of the case.

Additionally, unfazed by the lawsuit, SOL was up by 1.74 percent and was trading for $36.70, at press time.