Enforcement filed in California federal court charged a case against the senior authority of Solana Labs under the allegation that they have gained illegal profit by selling an unregistered security.
“The cornerstone of the value of SOL securities is the sum of Solana Labs, Solana Foundation, and [Anatoly] Yakovenko’s management and implementation of the Solana blockchain,” the suit alleged.
The case against Solana allegedly defines the SOL as a highly centralized cryptocurrency, allowing investors to gain benefits by deceiving retail traders.
Following his purchase of SOL tokens last summer, California resident Mark Young filed suit against Solana Labs, the Solana Foundation, Solana’s Anatoly Yakovenko, crypto VC giant Multicoin Capital, Multicoin’s Kyle Samani, and trading desk FalconX.
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Mark Young mentioned in the complaint that SOL tokens design and its sale only match three prong tests out of four of Howey Test. It is the method for the Supreme Court to determine whether the sale of something is a security or not.
“Purchasers who bought SOL securities have invested money or given valuable services to a common enterprise, Solana. These purchasers have a reasonable expectation of profit based upon the efforts of the promoters, Solana Labs and the Solana Foundation, to build a blockchain network that will rival Bitcoin and Ethereum and become the accepted framework for transactions on the blockchain,” the filing said, addressing the three forks of the Howey Test.
The case filed in California federal court also disclosed several SOL tokens or agreements sales before its actual public sale.
However, Solana Labs already holds filings of Form D with the U.S Securities and Exchange Commission (SEC), which excludes the sale of securities from the SEC registrations.
