In a recent official statement the Solana Foundation has addressed the classification of its native token, SOL, as a security. The foundation expressed surprise over the mention of the token by the U.S. regulator, emphasizing its commitment to building exceptional blockchain products. While the crypto community had previously debated the SEC’s decisions to label top tokens as unregistered securities, the Solana Foundation did not intend to confront the regulatory body. Instead, it expressed its willingness to collaborate with the agency to establish regulatory clarity for operating within the country.
In essence, the SEC considers securities as investment contracts, including traditional financial instruments like stocks, bonds, and shares. The agency advises a comprehensive evaluation to determine if a digital asset exhibits characteristics that would classify it as a security under federal law. Adding further complexity to the matter, the Solana Foundation has previously conducted private token sales, which are typically regarded as security offerings.
However, these sales were carried out through a Simple Agreement for Future Tokens (SAFT), enabling the Foundation to raise funds from institutional investors and venture firms. Compliance with SEC guidelines was maintained through appropriate filing procedures, with investors subjected to a holding period
Bloomberg contributor and legal expert, Matt Levine, expressed his view on the controversy in the article titled “When Is a Token Not a Security?”,opining that earlier securities offers of SOL should not necessarily define the token as a security now. He argued that while the SEC might find the current public trading of SOL tokens without adequate disclosure and investor safeguards regrettable, it is not directly Solana’s liability.
This development highlights the ongoing debates and challenges in providing clear regulations for digital assets.