Today, we're taking a look at the difficult issue of crypto and securities, following the filing of litigation by a California citizen, Mark Young, that might have far-reaching effects on the sector.
He accuses them of marketing and advertising unregistered securities in the form of SOL tokens from March 24, 2020, the day Mr. Mark began investing.
What is security, why do I care whether Solana is one, and how will this case influence my portfolio? To answer that, we must return to fair 1940s Florida, where we set our scenario.
Everyone was thinking about war. People yearned for some assurance. So the Howey Company, a citrus producer, devised an amazing solution:
Why not sell half of its groves in real estate contracts to fund future company ventures? Investors would then lease the land back to the corporation,
which would continue all of the previous labor - caring for trees, clipping leaves, caressing oranges, and so on - and divide any earnings with the new owners.
The corporation receives a large financial boost from the sale of the property, which it may reinvest in the business, and it also mitigates the risk of poor future harvests/decreases
in demand by accepting money ahead, Meanwhile, investors receive a consistent income stream for the foreseeable future. Isn't it the ideal solution?
That, however, was not how the SEC viewed it. Because, to the agency, what they were offering sounded suspiciously like securities, which are fungible financial items with monetary value.
So, possibly the effects of the litigation will mostly affect Solana. If the filing is successful against the coin, we should expect a similar scenario to what happened with XRP. Read Full article
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