- Solana is reportedly under criminal investigation, according to Bitlord.
- SOL was labeled a security by the SEC last year, raising legal concerns.
- Details about the investigation and leading agency are still unclear.
Solana is reportedly under investigation, according to a renowned influencer on social media platform X. Details remain unclear.
SOL is among the crypto tokens that received “security” branding from the US Securities and Exchange Commission (SEC) last year.
Solana Allegedly Under Criminal Investigation
Renowned influencer Crypto Bitlord, boasting nearly 330,000 followers on X, highlighted rumors of a possible criminal investigation against Solana. The probe is reportedly already weeks long and could bode poorly for the altcoin.
“We are hearing rumors that SOL is under investigation and a huge case is about to become public. This has been brewing for weeks now and could not come at a worse time. If what we heard is true, start praying for Solana,” Bitlord noted.
We are hearing rumors that $SOL is under investigation and a huge case is about to become public
This has been brewing for weeks now and couldn’t come at a worse time
If what we heard is true, start praying for Solana
— Crypto Bitlord (@crypto_bitlord7) June 24, 2024
The basis of the alleged investigation and the agency leading the probe remain unclear. However, there is speculation that it links to the SEC after labeling Solana as security. Polygon (MATIC) and Cardano (ADA) were also on the financial regulator’s list of tokens named as securities.
Along with the branding, the SEC sued Binance and Coinbase, charging them for trading unregistered securities. The essence of this lawsuit boiled down to the Howey Test, a legal framework that determines if an investment is a security.
At the time, SEC chair Gary Gensler said that “everything other than Bitcoin” can be labeled as a security.
Similar to Solana, Ethereum also attracted regulatory attention due to concerns about potentially being classified as an unregistered security.
However, the recent closure of the investigation in Ethereum’s favor has restored investor confidence. In contrast, legal expert Drew Hinkes believes that Solana might not experience the same positive outcome.
“Ethereum 2.0 investigation was a win for the company but doesn’t mean much for other [Proof-of-Stake] POS tokens,” Hinkes noted.
I shared some thoughts with @decryptmedia about why the declination letter received by @consensys from the #SEC about its #Ethereum 2.0 investigation was a win for the company but doesn't mean much for other #POS tokens: https://t.co/MDPyBK8tGI
— Drew Hinkes (@propelforward) June 20, 2024
The legal expert alludes to the remaining tokens still being on the hook. PoS coins like Solana and Polygon have presumably not been investigated, as in the case of Ethereum 2.0.
As such, their facts regarding creation and distribution, among other parameters, could be different from those of Ethereum.
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