Solana sued for being ‘centralized,’ ‘security’
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Layer-1 blockchain Solana (SOL) is faced with a class-action lawsuit in California filed by Mark Young, an investor in the token.
According to the court filing, the Solana Foundation, Anatoly Yakovenko, Solana Labs, Multicoin Capital, and FalconX profited from the sale of an unregistered security.
Mark Young had bought SOL between August and September 2021 but soon realized that the token was unregistered security that led to enormous losses for retail investors in the United States.
The lawsuit claimed that the defendants, like Multicoin Capital, promoted the tokens after buying them for $0.4 in 2019 and sold millions of SOL to retail investors at a profit. FalconX is accused of facilitating the dumping of SOL tokens by Multicoin Capital.
Solana peaked at $258 in November 2021 during the bull run of the crypto market. Per the lawsuit, this was possible due to the defendants’ efforts, and they profited from the massive rise in value while the average investor recorded losses.
The 40-page lawsuit also attacked the claim that Solana is decentralized.
The lawsuit believes that SOL is a security under the Howey test.
One of the most significant issues in the crypto industry is determining whether an asset is a security or not.
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