Web3 Foundation chief legal officer announces that DOT should be treated as software after three years of discussions with SEC
Daniel Schönberger, chief legal officer of the Web3 Foundation, a non-profit organization behind the development of the Polkadot (DOT) and Kusama (KSM) platforms, shares an important update on the dot token situation.
DOT token is software, not security: W3F
In a publication shared by the W3F main blog yesterday, Nov. 4, 2022, Schoenberger announced that Polkadot’s token DOT has morphed and is not a security any longer.
According to their statement, W3F representatives spent nearly three years in discussions with the US Securities and Exchange Commission (SEC). They were working to harmonize DOT status and use by the SEC’s financial hub to all requirements of the Framework for “Investment Contract” analysis of digital assets.
Ideologically, this policy stress tested the proactive approach in the interaction between cryptocurrency projects and regulators in the U.S. Three years of talks between entrepreneurs and watchdogs pioneered this modus of conversation:
As we saw, the stakes were high, and the chances of error were low. Whatever happened to a non-security, we set out to do it for DOT to become – or become – the native token of the Polkadot blockchain. And so, we decided to try to take on the SEC’s FinHub employees a “come and talk to us” offer.
Over the last three years, the role and functionality of DOT have transformed, or “morphed.” As such, by November 2022, the token is not a security any longer: it merely looks like “software.”
As previously covered by U.Today, the US has some of the strictest laws when it comes to unregistered security offerings. Several cryptocurrency giants, including Ripple, FTX and Celsius, were under fire due to the unclear status of their cryptos.
Former Acala (ACA) director: BTC, DOT are the only cryptos that are not securities. Is this true?
The Polkadot (DOT) community welcomed the announcement by Schoenberger. Robinson Burkey, former growth director of Polkadot’s DeFi hub Acala Network, highlighted that DOT is the first ever altcoin with such an impressive status.
Meanwhile, the offensive “soldiers” of the XRP military criticized his statement: he insisted that the SEC did not confirm the non-security status of the DOT.
Also, some of his followers recalled that back in 2020, Blockstack PBC filed a Form 1-U report with the SEC to confirm that the Stacks (STX) token was not a security.
