DOT, the native token of Polkadot, has gone down almost 5% following the initial pump on Friday. This occurred after the Web 3.0 Foundation published a blog post arguing that the token is “not a security.”
DOT went up 12% to $7.14 from around $6.40 over the last weekend, according to CoinGecko. It’s now trading at 6.84%, down almost 5% from the weekend high, and 88% from its all-time high.
The Web 3.0 Foundation carries out blockchain development and research. They argue that the U.S Securities and Exchange Commission (SEC) should no longer consider DOT a security.
Daniel Schoenberger, the foundation’s chief legal officer, said that while they “had not contemplated” that DOT would ever be considered a security, they nevertheless decided to work with the agency to avoid any future misunderstandings.
“As we saw it, the stakes were high, and the margin for error was slim. Whatever it took in order for DOT, the native token of the Polkadot blockchain to be – or to become – a non-security, we were willing to do it. And so, we decided to try to take the SEC’s FinHub staff up on the offer to “come in and talk to us,” he said. Schoenberger revealed that they’ve been working with FinHub for three years. Their intention was to develop “a workable theory of how token morphing may be achieved for an increasingly decentralized project.”
“Consistent with the views that we have shared with the SEC staff, we are pleased to announce that DOT, the native digital asset of the Polkadot blockchain, has morphed. In our view, current day offers and sales of DOT are not securities transactions, and DOT is not a security. It is merely software,” Schoenberger concluded. The SEC has recently been more involved in the crypto world. Last month, they charged Kim Kardashian for promoting the scam project EthereumMax. The SEC’s chairman Gary Gensler has said that he believes ETH, the native token of the Ethereum blockchain, is a security.
The SEC has also been in a legal battle with Ripple for several years, claiming that the project raised $1 billion by selling XRP tokens that are “unregistered securities.” The case is expected to conclude early next year.
On the Flipside
- It’s unclear whether the SEC will acknowledge the Web 3.0 Foundation’s claim that DOT is not a security.
Why You Should Care
Regulators have been paying more and more attention to the crypto industry. It’s important that crypto companies work together with the SEC and other regulatory bodies. Only together can they find solutions and clarify specific definitions for the industry to thrive.
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