$SOL investor files lawsuit against Solana & Multicoin  

A class-action suit filed in California federal court last week blames key players in the Solana ecosystem for illegally benefiting from SOL, the blockchain’s native token that according to the lawsuit is unregistered security.

The class-action suit mentions that the cornerstone of the value of SOL securities is the sum of Solana Labs, Solana Foundation, and Anatoly Yakovenko’s management and implementation of the Solana blockchain. It represented SOL as a highly centralized cryptocurrency that has profited its insiders to the disadvantage of retail traders.

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Solana Lawsuit Details


The lawsuit is filed by California resident Mark Young, who said he purchased SOL in late summer 2021, the suit includes names – Solana Labs, the Solana Foundation, Solana’s Anatoly Yakovenko, Multicoin’s Kyle Samani, crypto VC giant Multicoin Capital and trading desk FalconX.

A Solana spokesperson declined to comment on the situation. Multicoin and FalconX did not directly respond to a request for comment on this action suit.

In the complaint, Young alleges that the way SOL was designed and sold meets the three principles of the Howey Test, a U.S. Supreme Court precedent generally used as a barometer for whether the sale of something is a security or not.

Also Read, Solana’s Web3 Smartphone: Saga

The filing suit said that the purchasers who bought SOL securities have invested money or given worthwhile services to a common enterprise, Solana. These purchasers have a valid expectation of profit based upon the efforts of the promoters, Solana Labs and the Solana Foundation, to create a blockchain network that will rival Bitcoin and Ethereum and become the accepted framework for transactions on the blockchain, addressing the three forks of the Howey Test.

In the filing, Young pointed to several sales of the SOL token or agreements to trade the SOL token ahead of the public sale of the token.

Responding to this lawsuit Solana Labs filed a Form D with the U.S. Securities and Exchange Commission i.e. SEC. The filing said the sale was of securities excused from SEC registration, noting the company was selling “the future rights” to around 80 million SOL. 

Multicoin, a prominent crypto venture capital firm that has funded heavily in the Solana ecosystem, off-loaded millions of dollars of SOL onto retail after “relentlessly” promoting the token despite blockchain’s tech issues, the suit alleged. This alleged offload passed via FalconX OTC desks. Read more here.

Young’s law firm Roche Freedman also recently filed suit against Binance.US for allegedly deceiving investors during the Terra implosion.

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