Web3 Foundation Argues Polkadot (DOT) Is Software, But Will The SEC Follow?


Many cryptocurrencies that are sold to raise money can be considered securities. The SEC is currently evaluating these offers and taking  appropriate action. Polkadots and the Web3 Foundation want to be one step ahead and have issued a self-certification to avoid this mark. 

  SEC and Cryptocurrencies 

 It is a known fact that any cryptocurrency used to secure funding is theoretically an unregistered security. The 2017-2018 ICO season gave birth to this popular fundraising model, although people running such campaigns may have violated federal security laws. At the same time, the SEC  established FinHub, a center for innovation and fintech. 

  FinHub is tasked with investigating whether digital assets sold to raise funds are securities. The original research, titled "The Framework," suggested that all digital assets violate security laws. However, the paper also mentioned that brands can evolve over time and therefore avoid the "security brand" if there is sufficient argumentation. Regardless, the SEC officials will have to make the final decision. 

 Polkadot and the Web3 Foundation have strongly stated that DOT is not  security. Specifically, a document was  recently introduced to self-certify DOT as "software". That doesn't mean the SEC sees things the same way. However, the DOT has a benefit beyond the original fundraising approach  for Polkadot. The asset may have had  elements of  security at the time of fundraising, but later it became much more. 

 Furthermore, it is important to note that the Web3 Foundation has taken the bold step of starting an open dialogue with FinHub. The Polkadot-DOT exchange started three years ago, but the goal was clear. Ensuring DOT program changes is ambitious and currently only self-certifies. However, there are many valid arguments presented in this post. Those three years of negotiations with the SEC  count for something, and almost half of the 50 commitments were formal meetings. 

 Ticking all the boxes 

 All aspects of Polkadot and DOT were covered in these meetings and workshops. This includes  technology, asset usage and where the project is going in the Web3 era. By doing extensive work to maintain an open dialogue, Polkadot is paving the way for similar resources for other projects. This is no guarantee of avoiding the "security label", but it offers  hope. 

 The big question is how the SEC will evaluate the long list of funds under investigation. Specifically, former SEC Chairman Jay Clayton was not convinced, arguing that everything but bitcoin should be a security. Gary Gensler, the current chairman of the SEC, has a similar opinion on these issues. 

If the SEC can't afford to even consider another strategy, the uphill battle may not be over for Polkadot and the Web3 Foundation.

Source : coingape.com

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