SEC Labels Cardano, Solana, and Polygon As Securities in Three Lawsuits Against Crypto Exchanges

Cardano, Solana, and Polygon found themselves in the list of crypto assets the SEC labels as securities in three legal tussles against crypto exchanges. 

The native tokens of Cardano, Solana, and Polygon have found themselves in hot water after the United States Securities and Exchange Commission (SEC) labeled the crypto asset as alleged securities traded on Kraken, a U.S.-based crypto exchange. 

SEC Sues Kraken 

As reported earlier, the U.S. SEC charged Kraken with violating securities laws by operating an unregistered securities exchange, clearing agency, and broker. 

According to the SEC, the list of alleged securities traded on Kraken includes ADA, SOL, ICP, MATIC, SAND, ATOM, ALGO, CHZ, MANA, COTI, NEAR, AXS, FIL, and other assets. 

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The development comes several months after the SEC mentioned ADA as an unregistered security in its lawsuits against Coinbase and Binance. 

Besides ADA, the regulator also mentioned MATIC and SOL in all three legal battles against Binance, Coinbase, and Kraken. The development suggests that the SEC has resolved that ADA, SOL, and MATIC are unregistered securities. 

However, it will only take a court declaration to change the SEC’s narrative. 

Will SEC Go After Cardano, Solana, and Polygon Founders? 

It remains to be seen whether the SEC will take legal actions against the issuers of these coins as it did with Ripple Labs. Recall that the SEC had in December 2020 accused Ripple of conducting the offer and sale of $1.3 billion worth of unregistered securities in the form of XRP. 

However, the SEC was unsuccessful at giving XRP the security tag, as a federal judge declared that XRP in itself is not a security. 

Although the SEC has not signaled plans to charge the issuers of ADA, SOL, and MATIC with violating securities laws, there are speculations that the agency could take such an action after the conclusion of the Ripple lawsuit, which is currently in the remedies phase. 

Cardano Team Denies SEC Allegation 

Meanwhile, the Cardano team, led by the Input Output Global, has rejected the SEC’s claim that ADA is a security. Responding to the SEC complaints, the IOG said in a statement, saying: 

“Under no circumstances is ADA a security under U.S. securities laws. It never has been.”