Web3 Foundation chief legal officer announces that DOT should be treated as software after three years of discussions with SEC
Daniel Schoenberger, сhief legal officer of Web3 Foundation, a non-profit behind the development of Polkadot (DOT) and Kusama (KSM) platforms, shares a crucial update on the DOT token status.
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.
Web3 Foundation announces @Polkadot‘s native token DOT has morphed and is software, not a security!
After 3 years of proactive engagement with the @SECGov, W3F announces a landmark step towards the achievement of Web 3.0, a decentralized, trustless, serverless internet.
— Web3 Foundation (@Web3foundation) November 4, 2022
According to his statement, the representatives of W3F spent almost three years in discussions with the U.S. Securities and Exchange Commission (SEC). They were working to make the DOT status and usage compliant to all requirements of the Framework for “Investment Contract” Analysis of Digital Assets by SEC’s Financial Hub.
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 it, the stakes were high, and the margin for error was slim. Whatever it took in order for DOT, the native token of the Polkadot blockchain to be — or to become — a non-security, we were willing to do it. And so, we decided to try to take the SEC’s FinHub staff up on the offer to “come in and talk to us.”
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 covered by U.Today previously, the U.S. has the most severe laws when it comes to unregistered security offerings. Numerous cryptocurrency heavyweights, including Ripple, FTX and Celsius, were under fire due to the unclear statuses 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.
I have to imagine the days of @Polkadot falling to the background on CT are no longer, this is HUGE
— Robinson Burkey (@RobinsonBurkey) November 4, 2022
Meanwhile, his statement was slammed by aggressive “soldiers” of the XRP Army: they stressed that the SEC did not confirm the non-security status of 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.