Another major trouble has emerged in the world of cryptocurrency. Solana Labs has been slapped with a class action lawsuit. It is been alleged of making illicit profits by promoting unregistered security.
Will Solana case affect crypto market?
The consequence of this lawsuit can lead to a vital impact on the global crypto market. Solana (SOL), the native token of Solana Labs’ growth can be affected in the future. It will be trading under the doubt of whether it qualifies as the Security or not.
Meanwhile, Ripple Labs and its heads are facing similar charges by the U.S. Securities and Exchange Commission (SEC). The authority claims that XRP, the native token of Ripple is a security.
However, John Deaton, XRP token holders’ Lawyer in the case has raised warnings regarding the future of the crypto industry. In a tweet, he wrote, If XRP is deemed a “security” then hundreds of the class actions will be filed ahead. He added that not only tokens and exchanges but promoters of an altcoin can also come under this radar.
XRP involved in a similar case
Deaton mentioned that XRP has already been sued in a similar lawsuit as Solana. He highlighted that exchanges have class action waivers incorporated within the agreement. If by any chance those waivers are upheld then organisations like Ripple, Ethereum, Stellar, and Algorand can come to a target. Deaton emphasized that a lot is at stake.
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He further added that SEC is in their case SEC alleges that the XPR token itself is a security. This also includes secondary market sales apart from Ripple.
Meanwhile, Roche Freedman LLP and Schneider Wallace Cottrell Konecky filed the class action against Solana on July 1. It is alleged that the Solana Foundation, Solana Labs, Multicoin Capital Management, Anatoly Yakovenko, Kyle Samani, and FalconX were selling unregistered securities SOL from March 24, 2020.
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