Solana is reportedly under investigation, according to a renowned influencer on social media platform X. Details remain unclear.
SOL is among the crypto tokens that received “ security ” branding from the US Securities and Exchange Commission (SEC) last year.
Solana Allegedly Under Criminal Investigation
Renowned influencer Crypto Bitlord, boasting nearly 330,000 followers on X, highlighted rumors of a possible criminal investigation against Solana. The probe is reportedly already weeks long and could bode poorly for the altcoin.
“We are hearing rumors that SOL is under investigation and a huge case is about to become public. This has been brewing for weeks now and could not come at a worse time. If what we heard is true, start praying for Solana,” Bitlord noted .
The basis of the alleged investigation and the agency leading the probe remain unclear. However, there is speculation that it links to the SEC after labeling Solana as security. Polygon ( MATIC ) and Cardano (ADA) were also on the financial regulator’s list of tokens named as securities .
Also Read: Four Reasons Why Ethereum Is Not a Security: Consensys
Along with the branding, the SEC sued Binance and Coinbase , charging them for trading unregistered securities. The essence of this lawsuit boiled down to the Howey Test , a legal framework that determines if an investment is a security . At the time, SEC chair Gary Gensler said that “everything other than Bitcoin” can be labeled as a security.
Similar to Solana, Ethereum also attracted regulatory attention due to concerns about potentially being classified as an unregistered security. However, the recent closure of the investigation in Ethereum’s favor has restored investor confidence. In contrast, legal expert Drew Hinkes believes that Solana might not experience the same positive outcome.
“Ethereum 2.0 investigation was a win for the company but doesn’t mean much for other [Proof-of-Stake] POS tokens,” Hinkes noted .
The legal expert alludes to the remaining tokens still being on the hook. PoS coins like Solana and Polygon have presumably not been investigated, as in the case of Ethereum 2.0 . As such, their facts regarding creation and distribution, among other parameters, could be different from those of Ethereum.
