Solana, Polygon challenge US SEC’s classification of SOL and MATIC as securities

The Solana Foundation and Polygon Labs are among the latest entities to push back against the U.S. Securities and Exchange Commission’s (SEC) classification of their respective tokens as securities.

Solana Foundation and Polygon Labs push back against the SEC

Both organizations have expressed their disagreement with the regulatory body’s assessment, emphasizing their commitment to operating outside the scope of U.S. markets.

The Solana Foundation, which oversees the development of the Solana blockchain, expressed its willingness to cooperate with regulators to bring clarity to the emerging industry.

The Solana Foundation disagrees with the characterization of SOL as a security. We welcome the continued engagement of policymakers as constructive partners on regulation to achieve legal clarity on these issues for the thousands of entrepreneurs across the U.S. building in the…

— Solana Foundation (@SolanaFndn) June 10, 2023

Despite its disagreement with the SEC’s classification of SOL, the native cryptocurrency of the Solana network, as a security, the foundation welcomed engagement with policymakers to achieve legal clarity for entrepreneurs operating in the digital asset space.

The SEC has filed lawsuits against Binance and Coinbase, accusing the exchanges of facilitating the trading of unregistered crypto asset securities, including solana (SOL) and polygon (MATIC).

However, according to the Solana Foundation, SOL’s use within the network makes it more akin to a utility token than a security.

MATIC not targeted at the US market

Similarly, Polygon Labs clarified that their token, MATIC, was not targeted at the U.S. market.

Polygon asserted that its development team has ensured that MATIC is available to a broad group of users while maintaining its focus on the global community.

We are proud of the history of the Polygon network – developed outside the US, deployed outside the US, and focused to this day on the global community that supports the network. MATIC was a necessary part of the Polygon technology from Day 1, ensuring that the network would be…

— Polygon (Labs) (@0xPolygonLabs) June 10, 2023

Interestingly, the SEC’s lawsuits also identified several other tokens, including cardano (ADA), Sandbox (SAND), filecoin (FIL), and Axie Infinity (AXS), as securities.

Among the tokens labeled as securities, MATIC experienced an 8% increase in the past 24 hours, reaching $0.6273 at the time of writing, according to CoinGecko data.

SOL experienced a 5.7% rally in the past 24 hours, reaching $15.58, with a trading volume of more than $733 million. However, the token’s price has faced downward pressure, declining by over 20% in the past seven days following its delisting from Robinhood and subsequent whale sell-offs.

The outcome of the SEC’s lawsuits will undoubtedly have far-reaching implications for the crypto industry, especially concerning the regulatory classification of tokens.