Polkadot (DOT) Argues it is Not A Security But Software

FinanceFeeds Editorial Team

There is a lot of debate on whether cryptocurrencies are unregistered securities. Opinions on that front are divided, yet Polkadot wants to be taken off the list. More specifically, the DOT token can be seen as “software”  rather than a security. 

Polkadot (DOT) Evolved And Morphed

Like any other cryptocurrency initially sold for fundraising purposes, Polkadot’s DOT was on the radar as a potential security. However, it would be an unregistered security, which could create tremendous problems for the project, token holders, exchanges, wallet operators. etc. The 2019 “FrameWork” would only emphasize that point, even if it allows digital assets to be re-evaluated later. 

Much has changed since 2019, yet the labels and phrasing remain uncertain. The SEC has shown an increase in scrutinizing cryptocurrencies, especially those used for fundraising purposes. As such, many projects, including Polkadot, find themselves in an awkward position. However, the team has taken the necessary steps to rebuke doubt over DOT being a security. 

Following a lot of hard work, DOT can now be classified as software rather than a security. It is the culmination of a three-year dialog between the Web3 Foundation and the SEC. There has been plenty of back-and-forth regarding how Polkadot positioned itself when it launched and what it has become since then. With decentralized governance and on-chain treasury, DOT is – in the view of the Web3 Foundation – merely software. 

Making that argument is one thing, but convincing the SEC is never easy. While Chief Legal Officer Daniel Schoenberger makes a solid case for how DOT has “morphed”, the SEC has yet to sign off on this new label. The healthy and cordial relationship between the Web3 Foundation and the SEC’s FinHub outfit may help move things in the right direction. A resolution of the matter remains up in the air, but the progress by Schoenberger confirms initial securities can evolve into something else. 

Self-Certification Sends A Strong Signal

It remains crucial to note that the SEC can still treat DOT as security. The label “software” is a self-certification by the Web3 Foundation rather than an official ruling. However, it confirms the team’s commitment to providing clarity to the project and potentially creates a precedent for other assets that might fall under the “security” label today.

One thing to consider is how DOT has real utility. The same cannot always be said about most crypto assets. DOT is used for network governance, staking, and bonding. Asset holders have complete control over the protocol and keep the network secure by staking DOT. In addition, by bonding tokens, they enable the addition of more parachains and removal of outdated or non-useful chains. 

Read this next

Retail FX

Orfinex joins Financial Commission as approved broker member

Multi-asset brokerage firm Orfinex has become a member of the Financial Commission, joining the ranks of the self-regulatory organization. This accreditation reassures traders that the firm meets the quality standards set by the commission.

Fintech

Telegram CEO’s Bitcoin stash valued in hundreds of millions

Telegram CEO Pavel Durov revealed that he has held several hundred million dollars in fiat and bitcoin for the past decade.

Digital Assets

Bitcoin drops below $60K as halving just 300 blocks away

Bitcoin fell below the $60,000 mark on April 17, just days before a scheduled reduction in mining rewards, known as the “halving,” which is set to occur on April 20.

Chainwire

New Meme Coin ICO Dogeverse Raises $6 Million After Completing Coinsult Audit

A new multichain meme coin, Dogeverse, has raised $6 million in its presale and recently passed a smart contract audit.

The new meme coin leverages bridge technology, ensuring the token is available across the most prominent on-chain markets.

Retail FX

Interactive Brokers posts Q1 earnings, raises dividend

Interactive Brokers Group Inc (NASDAQ:IBKR) announced its first-quarter financial results for the period ending March 31, 2024. The leading automated global electronic broker reported a GAAP diluted EPS of $1.61 and an adjusted EPS of $1.64.

Fundamental Analysis, Tech and Fundamental

Global FX Market Summary: USD, FED, Gold  April 17 ,2024

The Fed’s hawkish stance on interest rates is strengthening the US dollar while central banks globally grapple with inflation and economic growth.

Digital Assets

Kraken launches self-custodial wallet, joining competitors like Coinbase

Kraken, the second-largest U.S.-based cryptocurrency exchange, has introduced its own digital wallet, aligning its offerings with those of competitors like Coinbase.

blockdag

BlockDAG’s Lunar Teaser Skyrockets Presale to $17.8M! Polkadot’s Price Soars with Optimism & Chainlink Unveils Updates

Polkadot (DOT) price prediction expects a rally as DOT garners attention for its high development activity, whereas Chainlink launches a new bridging tool. Meanwhile, BlockDAG has entered stage 9, with an impressive $17.8 million garnered in its ongoing presale.

Chainwire

MetaWin Announces Innovative TOKENIZED Tesla Cybertruck Contest on Ethereum’s Base Layer 2 Blockchain

This NFT, which represents full ownership rights to The Cybertruck, has been launched on the Ethereum Base Layer 2 blockchain operated by cryptocurrency giant Coinbase.

<