Solana Slammed With ‘Securities Violation’ Lawsuit Painting SOL As A Centralized

The Solana Ecosystem is facing a class-action lawsuit for allegedly profiting from “unregistered securities” (being SOL, the native token of Solana) to the detriment of investors. The plaintiff alleges that Solana’s securities marketing strategy was in violation of the registration provisions established within Federal & State laws. He demands a jury trial.

Solana Network Snags

In the lawsuit, Plaintiff, California-based SOL investor Mark Young, further accuses the defendants which include Solana Labs and the Solana Foundation, of propagating misleading information about SOL, including but not limited to SOL’s total circulating supply and the decentralization of the Solana blockchain.

The suit also addresses the seemingly incessant outages that had for some time plagued the Solana blockchain as well as the congestion issues experienced, both of whom inadvertently resulted in losses for SOL investors as several of them saw their positions liquidated before the issues were fixed.

Other defendants include Russian engineer and CEO of Solana, Anatoly Yakovenko; Crypto investment firm, Multicoin Capital Management LLC; co-founder of Multicoin Capital, Kyle Samani; and California-based company, Falcon, LLC. Neither Solana Labs nor any of the defendants have issued any statements in response to the lawsuit.

The lawsuit will be handled by legal firms, Roche Freedman LLP and Schneider Wallace Cottrell Konecky. Roche Freedman also handled the case against Binance.US in connection with the LUNA/UST crash. The company promises to pursue similar cases against crypto exchanges Coinbase, Kraken, and Gemini in the foreseeable future.

Solana (SOL) has grown to seal its position on the Top 10 Crypto list

Solana was founded in 2017 by Anatoly Yakovenko et al. The tech firm developed the Solana blockchain – a proof-of-stake chain home to a number of decentralized apps and crypto projects. Though the network has seen a lot of troubling hurdles along the way including network outages and congestions, it remains among the top chains out there.

SOL, the native token of Solana has grown to seal its position on the Top 10 Cryptocurrencies list with a market capitalization of $13.5 billion. Despite having crashed from its all-time high of $260 in November 2021, the asset has held up quite well during this Crypto Winter, showing promising prospects in July.

Early last month, Solana Ventures and the Solana Foundation revealed a benevolent plan to assist Web3 start-ups in South Korea with $100 million funding in an effort to encourage and promote crypto businesses in the region.