Polkadot native token DOT is no longer a security and is now software, according to Web3 Foundation, the firm behind Polkadot and Kusama.
The US Securities and Exchange Commission (SEC), with whom the Foundation has been actively collaborating for three years and which began in November 2019, was the basis for the announcement, according to the Foundation. The business accepted the SEC’s invitation to “come in and chat to us.”
Polkadot Engages SEC
A blog post by Web3 Foundation Chief Legal Officer Daniel Schoenberger also explained the development. He said that Polkadot did not envision that its DOT token would be security and has worked to be in compliance with federal securities law.
The Strategic Hub for Innovation and Financial Technology (FinHub) of the SEC published its Framework for “Investment Contract” Analysis of Digital Assets in 2019, just a few months before Polkadot launched in 2020. Almost all digital assets offered and sold for fundraising reasons are now regarded as securities thanks to this approach.
The framework did, however, also emphasize that an asset that was initially regarded as a security may undergo a reevaluation.
The Web3 Foundation claims that DOT changed into software
As a result, the Web3 Foundation has been in communication with the SEC FinHub for three years. Regarding the issuance of its native token and the treatment of buyers during that time, the Foundation made compliance a priority and followed all US securities laws.
According to Schoenberger, the company was able to better comprehend the SEC’s issues and come up with remedies as a result of the constructive interaction with the regulator.
The business currently thinks that the DOT token has changed into software given its interactions with the SEC over that time and how it has complied with all applicable regulations.
“In our view, current-day offers and sales of DOT are not securities transactions, and DOT is not a security. It is merely software.”
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