Cardano Foundation Asserts ADA’s Non-Security Status, Vigorously Defends Position to SEC Chair Gary Gensler

• According to Gary Gensler, the SEC chair, the agency considers “everything other than Bitcoin” as security within its jurisdiction.
• In a tweet, Cardano said it holds a differing perspective regarding the recent categorization of ADA as a security under the jurisdiction of U.S. law.

The Securities and Exchange Commission has claimed in a lawsuit against Binance, a cryptocurrency exchange, that certain well-known cryptocurrencies such as Solana, BNB, and the native tokens for Polygon and Cardano are considered securities.

Today we charged Binance Holdings Ltd. (Binance); U.S.-based affiliate, BAM Trading Services Inc., which, together with Binance, operates https://t.co/swcxioZKVP; and their founder, Changpeng Zhao, with a variety of securities law violations.https://t.co/H1wgGgR5ir pic.twitter.com/IWTb7Et86H

— U.S. Securities and Exchange Commission (@SECGov) June 5, 2023

Binance and its CEO Changpeng Zhao faced 13 charges, alleging various misconducts such as mixing customers’ funds and attempting to circumvent U.S. securities regulations through “web deceptions” to determine business partnerships with the company.

This represents a noteworthy advancement for the cryptocurrency sector since when the SEC designates a particular token as a security, brokers may become hesitant to provide it, leading to reduced liquidity and potentially causing a decline in value.

According to Gary Gensler, the SEC chair, the agency considers “everything other than Bitcoin” as security within its jurisdiction. It is worth noting that the crypto data site CoinMarketCap lists approximately 25,500 cryptocurrencies.

Cardano Responds to Being Regarded As A Security.

In a tweet on its official Twitter account, Cardano said it holds a differing perspective regarding the recent categorization of ADA as a security under the jurisdiction of U.S. law. The proof-of-stake blockchain platform stated, “We look forward to the continued engagement with regulators and policymakers to achieve legal clarity and certainty on these matters.” 

Additionally, the Cardano Foundation said they will continue to actively participate in the ecosystem, ensuring that Cardano remains a dynamic and robust platform for its users, developers, and the broader crypto community. 

SEC Lawsuits Lead to the Classification of 67 Cryptocurrencies as Securities

The United States securities regulator has expanded its list of cryptocurrencies classified as “securities” to approximately 67, following the inclusion of several additional tokens in its lawsuits against crypto exchanges Binance and Coinbase.

The list of 67 cryptocurrencies allegedly categorized as “securities” results from multiple litigations conducted by the Securities and Exchange Commission over the years. Through these legal proceedings, the SEC has specified the cryptocurrencies it considers to fall under the classification of securities.

Additionally, In its legal action against Binance, the U.S. Securities and Exchange Commission (SEC) explicitly identified 12 tokens as securities. The 12 tokens specified in the Binance lawsuit by the SEC are BNB (BNB), Binance USD stablecoin (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos Hub (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), and Coti (COTI).

In the SEC’s Coinbase lawsuit, the SEC named 13 tokens. They include the already mentioned SOL, ADA, MATIC, SAND, and AXS and an addition of six more: Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP), Near, Voyager Token (VGX), and Nexo.

The SEC has classified Ripple’s XRP, LBRY Credits (LBC) from LBRY, and Algorand (ALGO), among other notable cryptocurrencies, as securities, the SEC specifically mentioned Ripple’s XRP, LBRY’s LBC (excluding secondary sales), and Algorand in its lawsuit against Bittrex in April.

As a result of the SEC’s litigated jurisdiction over the cryptocurrency space, its coverage now extends to more than $100 billion in market value, which accounts for approximately 10% of the total crypto market capitalization of $1.09 trillion.

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