October 2, 2023

Cardano Rejects SEC Allegations Regarding ADA Security Status


The Cardano Foundation has responded to the recent lawsuit filed by the US Securities and Exchange Commission (SEC) against Binance. They have refuted the SEC’s allegations that Cardano (ADA) is one of the securities being offered on the Binance platform.

However, the Cardano Foundation expressed its disagreement with the categorization of ADA as a security according to US law through a Twitter statement on Tuesday. While refuting the SEC’s classification, the foundation also indicated its willingness to engage in discussions with policymakers to seek a better understanding and legal clarity on the matter.

Frederik Gregaard, the CEO of the Cardano Foundation noted that “We look forward to the continued engagement with regulators and policymakers to achieve legal clarity and certainty on these matters.” This statement was quoted in an article published by Fortune Magazine.

Gregaard’s statement emphasizes the ongoing discussion and lack of clear regulations surrounding the classification of cryptocurrencies. As regulators continue to grapple with defining guidelines, the Cardano Foundation aims to actively participate in conversations to obtain legal certainty regarding the status of ADA.

Related article: Cardano Founder’s Perspective on Binance’s SEC Regulatory Complaint

Cardano Included in The New SEC List

According to a report, on Monday, the largest cryptocurrency exchange, Binance, was sued by the US regulatory body. The lawsuit alleged that the platform facilitated trading of several prominent assets that are considered securities. This list included Cardano (ADA), Solana (SOL), and Binance Coin (BNB).

Gary Gensler, the chairman of the SEC, has expressed support for broadening the range of cryptocurrencies classified as securities. He argues that the majority of tokens, with the exception of Bitcoin (BTC), should be treated as investment contracts and be subject to registration with the SEC.

Furthermore, while the recent lawsuit did not include Ethereum (ETH), there are indications, as reported, that Ethereum may potentially be classified as a security. 

Although Ethereum (ETH) was not specifically mentioned in the SEC’s updated list of security tokens, Jack Dorsey, the former CEO of Twitter, has publicly expressed his belief that ETH should be considered a security. He made this statement in response to the recent lawsuit against the American exchange Coinbase.

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