SOL Investor Accuses Solana Labs, Multicoin For Breaking Securities Law
- Binance.US was sued for allegedly deceiving investors during the Terra implosion by Young’s legal firm Roche Freedman.
- Young drew attention to SOL token sales or agreements to sell SOL tokens in the filing before the token’s open sale.
- A representative for Solana declined to comment. A request for feedback from Multicoin and FalconX did not receive a prompt response.
The lawsuit names Solana Labs, its founder Anatoly Yakovenko, the Solana Foundation, and a number of exchanges, including Binance, as defendants. It alleges that they violated federal securities laws by selling unregistered securities to retail investors.
The suit is seeking unspecified damages and an injunction to stop the defendants from continuing to sell SOL. The complaint paints a picture of a highly centralized cryptocurrency that has benefited its insiders to the detriment of retail traders.
It alleges that Yakovenko and the other defendants have profited handsomely from the sale of SOL while ordinary investors have been left holding the bag. The suit comes at a time when Solana is facing increased scrutiny from regulators around the world.
Recently, the U.S. Securities and Exchange Commission (SEC) issued a warning about potential scams involving digital assets like SOL. And also, China’s central bank launched an investigation into Solana’s Chinese partner OKEx for allegedly violating anti-money laundering regulations.
Solana Labs, the Solana Foundation, Anatoly Yakovenko of Solana, multibillion-dollar cryptocurrency venture Multicoin Capital, Kyle Samani of Multicoin, and trading desk FalconX are named in the lawsuit brought by California citizen Mark Young, who claims to have purchased SOL in late summer 2021.
A representative for Solana declined to comment. A request for feedback from Multicoin and FalconX did not receive a prompt response.
The lawsuit claimed that Multicoin, a significant cryptocurrency venture capital firm that has made significant investments in the Solana ecosystem, “offloaded millions of SOL” onto retail after “relentlessly” promoting the token despite the Solana blockchain’s technical difficulties. According to the lawsuit, this claimed unloading went through FalconX OTC desks.
Recently, Binance.US was sued for allegedly deceiving investors during the Terra implosion by Young’s legal firm Roche Freedman. Roche Freedman’s legal counsel did not answer the phone.