DOT Not A Security, Claims Web3 Foundation
- Web3 Foundation has stated that the United States Securities and Exchange Commission (SEC) should not consider the governance token of the Polkadot network, DOT, has a security.
- Web3 Foundation Team’s chief legal officer Daniel Schoenberger stated that the native token of the platform has been “morphed” and is now merely a software.
- The CLO also added that Web3 Foundation met on several occasions with the fintech wing of SEC, FinHub, to discuss how DOT and its blockchain could comply with federal laws
Web3 Foundation, an organization responsible for supporting the development and fundraising of the Polkadot (DOT) network, has stated that the United States Securities and Exchange Commission (SEC) should not consider the governance token of the platform as a security because it is “merely a software” and added that it should not fall under the regulatory purview of the securities regulator under Gary Gensler.
In a blog post date Nov. 4, Web3 Foundation Team’s chief legal officer Daniel Schoenberger stated that the DOT token had “morphed” and is therefore, no longer a security but just a piece of software. Additionally, Schoenberger also stated that the claim was “consistent with the views” that Web3 Foundation had shared with SEC in November 2019.
“While the Polkadot vision had not contemplated that the blockchain’s native token would be a security, we understood that the SEC’s view was likely to be that the to-be-delivered token would be a security, at least at the time of delivery,” said Schoenberger. “Whatever it took in order for DOT, the native token of the Polkadot blockchain to be — or to become — a non-security, we were willing to do it.”
Additionally, the CLO also added that Web3 Foundation met on several occasions with the fintech wing of SEC, FinHub, to discuss how DOT and its blockchain could comply with federal laws and explained that the token was not a security offering but a software. The meeting with FinHub was a part of SEC Chair Gary Gensler’s longstanding offer for crypto firms to “come and talk” and discuss regulations as well.
The result of the regulations was that the team decided to develop a “workable theory of how token morphing may be achieved” so that DOT was capable of complying of securities laws. The blog post confirmed that Web3 Foundation relayed multiple times to the securities regulator that the native token of Polkadot network was not a security but it is yet to receive a statement from SEC and what it believes.
“W3F met regularly with the SEC and attempted to break new ground and comply with U.S. federal securities laws, with respect to the offer & sale, marketing & delivery to initial purchasers & treatment of retail purchasers, in line with public companies,”
said Web3 Foundation via Twitter.
SEC Chair Gensler has often called Bitcoin (BTC) as a commodity while calling other cryptocurrencies as securities. His stance on the same remains unchanged and it will definitely be worth it to see if the regulatory authority changes its stance on DOT. If it does, then there is a possibility that several other “software” firms focused on development of Web3 and crypto might come forward claiming that their tokens are not securities.
In the light of similar events, it is also crucial to note that the co-founder of Polkadot, Gavin Woods, has officially stepped down from his role as the CEO of Parity Technologies, the key backer responsible for supporting the parachain focused blockchain network.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
