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Since last week, the US Securities and Exchange Commission has been on the hunt for various crypto and coin exchanges. The agency sued the number one crypto exchange, Binance, and another Tier 1 exchange, Coinbase. Then ADA, SOL and MATIC securities were declared in the same breath. The consequences were dire. The cryptos had to accept significant losses in value (up to 30% on a weekly basis) and the new broker Robinhood removed all three coins from the offer – although a final judgment has not yet been issued by a court.
Cardano, Solana and Polagán speak out
Probably no one expected the SEC’s action to go unnoticed. It all started with the IOG – the organization behind Cardano. At the beginning of June, they issued a press release saying that there were many inaccuracies in the classification. According to them, ADA is not a security under the US securities laws under any circumstances. However, IOG welcomes cross-industry collaboration with regulators, which would not only help protect consumers, but also foster innovation within organizations building decentralized protocols. However, IOG sees SEC lawsuits as discrimination and proof that the industry still has a long way to go. Read the full press release.
Solana and Polagán followed suit. Polygon Labs commented on the allegations on Twitter. He says they are proud of the Polygon network, which was developed and deployed outside the United States and to this day points to a global community that supports the network. MATIC has been an important part of Polygon technology since day one. Given Polygon’s focus on network security, the company has ensured that MATIC is available to a wide audience. The measures were never aimed at the US. Polagán believes that the non-US market is the largest in the world and is grateful for the intensive work being done around the world on all aspects of (blockchain) technology, including regulators and policy makers.
The full tweet:
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 has been an essential part of Polygon technology since Day 1, ensuring that the network…
— Polygon (Labs) (@0xPolygonLabs) June 10, 2023
The Solana Foundation also does not see SOL as a security. The native token base is the Solana Blockchain. This in turn is an open source, community-based software project. This depends on the decentralized participation of developers and users to evolve.
What is the Howey test really?
To determine whether a security is involved, the SEC relies on something called the Howey test. Now it gets a little weird. This test dates back to 1946 (!) – long before there was anything like blockchain. The case was against the company WJ Howey Co. whether the service offer was an investment contract or a property purchase contract.
The four questions of the Howey test are:
- Cash investment: Is it a cash investment?
- In a joint venture: Is it an investment in a company?
- Expected to profit: Are profits expected?
- To derive from the efforts of others? Are there third parties responsible for generating profits?
What is also interesting: the lawsuits do not affect XRP or Ripple. They have been fighting the SEC in US court since 2020. A verdict is expected this summer. This could be a trend setting for the entire crypto industry.
Wall Street Meme – the laughing winner in the SEC scramble
The third laughing party in the CSS tussle with altcoins are the meme coins. Because it’s a feature of almost all mock currencies that they have no utility – and that which has no use cannot easily be declared a security.
— Wall Street Memes (@wallstmemes) June 12, 2023
So it’s no surprise that the WSM PreSale was well received by investors. Within 10 days, the project managed to collect about four million US dollars to raise capital. It is now over $6 million. The team specifically emphasizes that the WSM has no utility.
Plenty of meme bases always lie in the community. The best example is probably the “father of all memes”, the Dogecoin. The Dogarmy, led by “DoGFather” Elon Musk, is extremely strong and has saved the base time and time again. It is not for nothing that the DOGE is always at the top of the crypto rankings.
However, the WSM does not need to hide behind this. About 1 million people follow the Wall Street Memes project on social media. So the potential of the coin is huge. WSM price is currently at $0.0283 in PreSale.
Last updated on June 12, 2023
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