The crypto industry could be in a major setback as the developers of Solana (SOL) are caught in legal crosshairs. The crypto industry is currently battling the effect of Terra’s collapse among other issues which has led to price fall.
The recent crisis around crypto credit environment is already proving to be costly for the crypto and blockchain community.
Mark Young, a California based SOL investor filed a lawsuit against the Solana developers, claiming that the tokens are unregistered securities. The lawsuit claims Solana Labs, the Solana Foundation and Anatoly Yakovenko, co-founder of the project as defendants. The plaintiff’s argues that the Solana developers violated U.S. securities laws in sale of the SOL securities.
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The lawsuit claims that the Solana developers deliberately made misleading statements about the total circulating supply of SOL securities. The Solana initial coin offering in April 2020 gave the developers funds to promote SOL project, it said. “As a result of these promotional efforts, SOL securities reached a peak price of $258 per token, with a market capitalization of more than $77 billion, on November 5, 2021.”
The plaintiff claims Yakovenko admitted that Solana did not disclose information about Solana total supply and circulating supply. The irregularities happened during the CoinList auction and the subsequent Binance listing, it added.
The lawsuit stated that the promotions took SOL from “relatively obscure crypto-asset to one of top crypto-assets in the world.”
Meanwhile, the Solana (SOL) price showed improvement this week with a 16.44% rise over the last 7 days. As of writing, SOL price stood at $37.24, up 0.14% in the last 24 hours, according to CoinMarketCap.