- Cardano founder Charles Hoskinson denies SEC allegations that Cardano’s ADA token qualifies as a security.
- Hoskinson points out that no ADA was sold in the U.S. and the original financing was done in Japan with vouchers converted into ADA.
- IOG, the company behind Cardano, argues that enhancing functionality and adding features to the Cardano blockchain does not equate to selling a security.
Cardano founder Charles Hoskinson firmly refuted the recent allegations made by the U.S. Securities and Exchange Commission (SEC) regarding Cardano’s native ADA token, asserting that it does not qualify as a security. Hoskinson took to Twitter to express his disagreement with the SEC, stating that the facts are inconvenient for the regulatory body. He emphasized that no ADA was sold within the United States and clarified that the original financing took place in Japan through the issuance of vouchers, which were subsequently converted into ADA during an airdrop in 2017.
Hoskinson’s response was prompted by lawyer and crypto enthusiast Bill Morgan, who argued that the process of enhancing functionality and marketing a product, as seen with ADA, should not be equated with selling a security.
Cardano, an open-source, public blockchain project, was launched in 2015 by Charles Hoskinson, one of Ethereum’s co-founders. Its initial coin offering (ICO) was conducted in Japan, earning it the nickname “Japanese Ethereum.” At the time, Cardano’s ICO was one of the largest ever held in Asia, propelling ADA to become one of the leading cryptocurrencies by market capitalization.
The project gained recognition for its meticulous and peer-reviewed approach to blockchain development. However, it has faced criticism for being labeled as “vaporware” due to the perceived lack of practical use cases.
The SEC’s allegations against Cardano came in the aftermath of significant lawsuits targeting popular cryptocurrency exchanges, namely Binance and Coinbase. The regulatory body specifically identified ADA as an unregistered security being offered on these platforms.
In response, Input Output Global (IOG), the company behind Cardano, released a statement refuting the SEC’s claims. IOG argued that the ADA token does not meet the criteria to be classified as a security under U.S. securities laws. They maintained that their focus has been on enhancing and expanding the functionalities of the Cardano blockchain, akin to a software developer improving a product. According to IOG, this process does not involve the sale of a security.
As the news of Cardano’s founder Charles Hoskinson denying the SEC’s allegations continues to circulate, it is expected to have an impact on the South African cryptocurrency landscape. South Africa has been actively engaged in the crypto space, with a growing number of individuals and businesses adopting digital currencies