Input Output Global (IOG), the firm behind the development of the Cardano blockchain, has issued a statement in response to the U.S. Securities and Exchange Commission's (SEC) recent claim that Cardano's native token, ADA, qualifies as a security. IOG refuted the SEC's allegations, stating that "under no circumstances is ADA a security under U.S. securities laws."
This comes after the SEC filed lawsuits against cryptocurrency exchange giants Binance and Coinbase for allegedly offering unregistered securities.
In the filings, the SEC has classified several prominent cryptocurrencies, including Cardano (ADA), Solana (SOL), and Polygon (MATIC), as unregistered securities. Binance's own tokens, BNB and the BUSD stablecoin, have also been categorized as securities.
The SEC's lawsuit further alleges Binance of violating U.S. securities laws by offering unregistered securities trading platforms, engaging in unregistered crypto asset securities sales, and improper commingling and diversion of customer funds.IOG expressed concern about the lack of understanding of decentralized blockchains and emphasized the importance of developing responsible legislation in collaboration with regulators.
It argued that good regulation should protect users and provide a legal framework that acknowledges the transparent and decentralized nature of blockchain. Amidst this regulatory upheaval, popular cryptocurrency trading platform Robinhood has indicated that it may delist several tokens implicated in the SEC lawsuit, including ADA, to remain compliant with U.S. securities laws.
IOG has firmly rejected the SEC's allegations and is prepared to defend the status of ADA. If ADA and other cryptocurrencies were to be officially classified as securities, this could lead to widespread implications for exchanges and traders, potentially reshaping the landscape of the cryptocurrency market in the U.S. As such, the resolution of this legal tussle will be closely watched by stakeholders within the blockchain and cryptocurrency industry.
As reported by U.Today, ADA and other coins named in the lawsuits are at risk of being delisted from the Robinhood trading platform to ensure compliance with U.S. securities laws.