Cardano Developer Dismisses SEC Allegation on Listing of ADA as Security
On June 9, Cardano development company Input Output Global (IOG) opposed the US Securities and Exchange Commission (SEC) classification of nineteen crypto assets. Earlier, the SEC had classified Cardano native token ADA as a security.
In their report, the IOG argued that the SEC listing of major crypto assets had numerous factual errors. The seventh largest crypto asset by market capitalization was grouped under the securities category on the SEC list.
Other crypto assets that were grouped as securities included Nexo (NEXO), Voyager (VGX), Filecoin (FIL), Sandbox (SAND), and Chiliz (CHZ), among others.
SEC Lists ADA as Security
A recent study on the SEC classification of digital assets by prominent crypto market analyst Miles Deutscher illustrated that most coins exhibited similar characteristics. Per Deutscher findings, the tokens grouped as securities had a initail sale for fundraising events. He noted that the tokens are undergoing continuous development to improve the protocol’s functionality.
Deutscher observed that the digital assets had leveraged their online presence to gather insightful inputs on improving the token features and to tap into other promising digital opportunities.
According to IOG, the SEC listing lacked substantial evidence to support their claims that ADA is a security. The IOG opposed the SEC listing of best-performing crypto assets that could affect the operation of trading platforms.
The IOG asserted that the decentralized blockchain network is crucial in creating an effective legislative arm.
On June 5, the SEC filed a new lawsuit against Binance and its chief executive for violating the securities regulations. A court filing submitted at the US federal court indicated that Binance offered unregistered cryptos.
Subsequently, Binance CEO Changpeng Zhao was accused of mishandling customers’ assets worth $12 million. The SEC noted that Zhao deposited $12 million to some of the companies he owned.
Cardano Refutes SEC Claims on Listing of ADA
In a Twitter statement, the founder of Cardano, Charles Hoskinson, labeled SEC’s potential action on Binance as an “all-out attack.” Hoskinson stated that SEC legal action was a regulatory tactic to ensure that crypto space is regulated by central authorities such as the central bank digital currency (CBDC).
Responding to ongoing legal tussle, the California-based crypto exchange Robinhood revealed plans to delist ADA, among other digital assets, to uphold conformity with SEC rules. The Robinhood team confessed that soon the crypto exchange would delist some of the coins listed by SEC as securities.
Reportedly ADA was listed on the Robinhood trading platform in September 2022. In their conclusion, the IOG outlined the features of a friendly regulation for crypto. The IOG urged the US regulatory agencies to provide a legal framework for crypto assets which protect consumers.
Cardano Market Outlook
The IOG proposed that the regulatory framework should have decentralized blockchain features. Also, the proposed regulatory framework must be clear and transparent.
In their report, the IOG regretted that the existing enforcement approach lacks clarity and certainty that blends well with the needs of the blockchain and crypto sectors.
However, the IOG confirmed that the SEC claims have minimal impact on the performance of Cardano. Irrespective of the regulatory clampdown, the IOG has pledged to invest in restoring customers’ confidence.
It was observed that the Cardano market performance reacted to the SEC news. As of this writing, ADA dropped by 3.34 % to trade at $0.3158 in a day.
CoinMarketCap data indicates that ADA trading volume dipped to $262,850,904, a 30% decrease within a day. At the time of this publication, 10:39 UTC, ADA market capitalization fell to $11,026,871,136, a 3.22% drop over the last 24 hours.
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