Is Cardano next on the Radar of the Sec? Here you can find out why Ada is a securities according to the SEC

Is Cardano next on the Radar of the Sec? Here you can find out why Ada is a securities according to the SEC

The US stock exchange supervisory authority (Securities and Exchange Commission) has submitted a 101-page lawsuit against the leading cryptocurrency exchange based in the USA-Coinbase. The accusation is that the company has violated securities regulations.

The step was only given a day after the SEC had also filed a lawsuit against Binance.

In the complaint against Coinbase, however, the Commission made strong claims and classified a list of 13 cryptocurrencies as securities. One of them is Cardanos Ada. So let's take a look at what the SEC has to say on this topic.

according to the Sec is ADA a securities

The agency presents a non-exhaustive list of 13 "crypto-asset securities", including SOL, Matic, Fil, Sand, AX and more. You can find the full list in our current report.

Ada is also present. The Commission presents the following considerations and refers to the three companies that are responsible for Cardano. These are the Cardano Foundation, Iohk and Emurgo - the profit -oriented branch of Cardano.

according to the claim:

"These three companies used the revenues from ADA sales to finance the development, marketing, business and growth of the Cardano protocol. For example, investor money was used to implement the Cardano roadmap created by IOHK-especially to develop each of the cardano development" epochs ... "

Sec, Cryptopotato Archives

The winning expectation

The SEC uses the popular Howey test to determine whether an asset is a security, especially with regard to cryptocurrencies.

The core principle of the Howey test on this topic can be summarized according to Seclaw on the following sentence:

"... a money investment in a joint company in which the profits come exclusively from the efforts of others; and if this test is met, it is irrelevant whether the company is speculative or not speculative or whether it is a sale of real estate with or without internal value."

In this regard, the claim of the SEC is also:

The information, which has been publicly common by Cardano, Iohk and Emurgo-also since the first sale of ADA-, including those who have bought ADA since March 2021, to consider Ada to a reasonably investment in the Cardano Foundation, to benefit from it, Iohks and Emurgos, to build the Cardano platform, which in turn would increase the demand for and the value of ADA.

It seems that the Sec is fully convinced that ADA fulfills the definitions of security. According to many, including Coinbase, the problem is that the SEC relies on a test created almost 60 years ago and does not take into account modern considerations and aspiring assets.

It is interesting to determine that the SEC has filed a lawsuit against it - the company behind XRP, which claims that the latter is a security.

The Cardano Foundation does not agree to the recent classification of ADA as security under US law. We look forward to further cooperation with regulatory authorities and political decision -makers in order to achieve legal clarity and security in these matters.

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