Cardano Developer IOG Rebuts SEC’s Claim That ADA Token is a Security, Asserts Inaccuracies in Lawsuits

IOG, the company behind Cardano, has rejected SEC’s claims made by the U.S. Securities and Exchange Commission (SEC) that the ADA token, Cardano’s native cryptocurrency, should be classified as a security.

In response to SEC lawsuits filed against major crypto exchanges Binance and Coinbase, which listed ADA among tokens considered securities, IOG stated that these claims were riddled with factual inaccuracies and would not affect their operations.

In a statement released on Friday, IOG emphasized that ADA is not a security under U.S. securities laws, and it has never been classified as such. The company stressed the importance of understanding the functioning of decentralized blockchains to create responsible legislation in the crypto industry.

IOG also expressed its concerns regarding regulatory actions based on enforcement, highlighting the lack of clarity and certainty they provide for both the blockchain industry and consumers. Despite the SEC’s allegations, IOG remains steadfast in its position that ADA does not fall within the scope of securities regulation.

Despite this, the news of the SEC’s claims had an impact on the ADA price, which experienced a 3% decline, as traders reacted to the perceived regulatory risks associated with the SEC’s actions against other tokens mentioned in the lawsuits.

Furthermore, the SEC identified several other tokens, including Polygon (MATIC), Sandbox (SAND), Filecoin (FIL), Axie Infinity (AXS), Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP), Near (NEAR), Voyager (VGX), Dash (DASH), and Nexo (NEXO), as securities.

The disagreement between IOG and the SEC highlights the ongoing debate surrounding the classification and regulation of cryptocurrencies. As the crypto industry continues to evolve, regulatory agencies worldwide are grappling with the task of adapting existing frameworks to effectively govern the crypto world.