Solana and Polygon criticise SEC’s token classification

The Solana Foundation disagreed with the approach of the U.S. Securities and Exchange Commission (SEC), which defines the native token SOL as a security.

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

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We welcome policymakers’ ongoing engagement as constructive partners in regulation to achieve legal clarity on these issues for thousands of entrepreneurs across the United States working in the digital assets space, the Foundation said.

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The Polygon team also criticised the SEC’s decision that the MATIC token is a security.

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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

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The ‘worldwide community-focused’ network was developed and deployed outside the United States. They said that MATIC was a necessary part of Polygon’s technology that guaranteed the security of the protocol.

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The regulator named MATIC and SOL, as well as a number of other tokens, securities in lawsuits against crypto exchanges Binance and Coinbase.

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According to CoinGecko, the two assets are close in market capitalisation. The SEC’s actions have put heavy pressure on token prices — over the past week SOL and MATIC fell by 29.5% and 28.5%, respectively.

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Earlier, the Hong Kong-based blockchain gaming operator Animoca Brands decided to focus on \”more progressive jurisdictions\” outside the United States, as the SEC named the SAND token an unregistered security.

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Gary Gensler, the chairman of the SEC, warned that the crypto industry is rife with fraud and resembles the securities market of the 1920s before regulation.