Cardano Developer Refutes SEC Allegations, Denying ADA’s Security Status

Input Output Global (IOG), the organization responsible for the development of the Cardano blockchain, has released a statement addressing the recent claim made by the U.S. Securities and Exchange Commission (SEC) regarding the classification of Cardano’s native token, ADA, as a security. IOG has strongly denied the SEC’s allegations, asserting that ADA does not meet the criteria for classification as a security under U.S. securities laws. 

This development follows the SEC’s legal actions against major cryptocurrency exchanges Binance and Coinbase, accusing them of offering unregistered securities. 

SEC calls ADA a Security, Reactions Surface

The U.S. Securities and Exchange Commission (SEC) has classified several prominent cryptocurrencies, such as Cardano (ADA), Solana (SOL), and Polygon (MATIC), as unregistered securities in their recent filings. Binance’s tokens, namely BNB and the BUSD stablecoin, have also been categorized as securities by the SEC. 

In addition, the SEC has filed a lawsuit against Binance, alleging violations of U.S. securities laws, including offering unregistered securities trading platforms, engaging in unregistered crypto asset securities sales, and mishandling customer funds.

IOG, the organization behind Cardano’s development, has expressed concerns regarding the SEC’s understanding of decentralized blockchains. It emphasized the need for responsible legislation developed in collaboration with regulators. 

IOG argued that effective regulation should safeguard users and establish a legal framework that recognizes the transparent and decentralized nature of blockchain technology.

In response to the SEC lawsuit, popular cryptocurrency trading platform Robinhood has indicated its intention to delist several tokens implicated in the case, including ADA, to ensure compliance with U.S. securities laws. 

Also Read: Binance Faces Scrutiny as DOJ Probes Alleged False Statements and Compliance Concerns

IOG firmly rejects the SEC’s allegations and is prepared to defend the status of ADA. The outcome of this legal dispute will be closely monitored by stakeholders in the blockchain and cryptocurrency industries, as it could have significant implications for exchanges and traders, potentially reshaping the cryptocurrency market landscape in the United States. 

According to CoinMarketCap data, ADA is trading at $0.3257, with a 4.5% drop in value over the last 24 hours.