Strongly rejecting SEC’s claims of Cardano’s ADA being security, founder Charles Hoskinson has taken to Twitter to clarify the token’s position.
His tweets were in response to Bill Morgan, a crypto aficionado, who noted how “weak” the SEC’s justification for what qualified security.
Imagine you create a product and then you add some feature or capability that makes it better. Then you post on a blog a description of your efforts to add more functionality and features to your product…Unless the thing you are improving & adding functionality to is crypto, and then magically it becomes a security.
According to the SEC, this is what qualifies as a security for secondary market transactions made on Coinbase’s exchange after March 2021 [when ADA was listed].
Hoskinson tweeted that the SEC primarily ignores the fact that ADA was initially sold in Japan during its first funding with vouchers that were then changed into ADA in an airdrop in 2017 and not in the US.
“Ada launched in 2017 as an airdrop two years after the voucher sale. The facts might be inconvenient to the SEC, but are facts,” he wrote.
It is important to remember that Hoskinson, one of the Ethereum co-founders, introduced Cardano in 2015 as an open-source, public blockchain.
As a result of the project’s initial coin offering [ICO] in Japan, it was given the moniker “Japanese Ethereum.”
Cardano was one of the biggest ICOs ever held in Asia at the time, and ADA soon rose to the top cryptocurrencies by market valuation.
Cardano’s ADA Nosedive By Roughly 30%
The crypto market was rocked by the SEC’s lawsuits against two biggest industry heavyweights on June 6 for allegedly violating securities laws among other charges.
Cardano reacted by falling nearly 30%, its worst debacle since May 2021, when the Terra collapse precipitated a cryptocurrency market meltdown.
Although the seventh-largest asset has somewhat recovered to trade at $0.28, it is still down more than 4% in the daily index.
Cardano’s ADA was one of the tokens identified as securities in the SEC’s filing, which prompted the founder of Cardano to launch an emotional Twitter outburst recently.
“With respect to Binance, I’m reading through the SEC complaint. It’s over 130 pages but seems like the next in a series of steps to implement chokepoint 2.0 in the United States.“
Hoskinson concluded his tirade by assuring his supporters that “we are going to be alright… The industry’s future is promising.