Solana Hit With Lawsuit for Selling Unregistered Securities Tokens

Key Insights:

• Solana Labs has been hit with a class-action lawsuit filed with a California court.
• The plaintiff accused SOL of promoting an unregistered security.
• Multicoin Capital and its co-founder Kyle Samani had allegedly flogged SOL securities, inflating its market price.

It has been tough times for Solana (SOL) labs in the recent past since the blockchain faced repercussions from the crypto community for halting its operations in May and couldn’t process any transactions for eight hours.

Solana is now facing another hard hit after being accused of drawing illegal profits from its native token SOL and being an unregistered security.

Class-action lawsuit filed

A California resident and a Solana investor Mark Young, the lead plaintiff, has filed a lawsuit with a local court, alleging that Solana Labs and its key parties were making misleading statements and selling unregistered securities.

Per the case filed on July 1, Solana Foundation, Solana CEO Anatoly Yakovenko, crypto investment firm Multicoin Capital and its co-founder Kyle Samani, and trading platform FalconX were bashed.

The individual investor Young, on behalf of investors who purchased SOL tokens from March 2020 till the date of filing, wrote,

“Defendants made enormous profits through the sale of Solana (SOL) securities to retail investors in the United States, in violation of the registration provisions of federal and state securities laws, and the investors have suffered enormous losses.”

Solana Labs founder Anatoly Yakovenko and Kyle Samani of Multicoin “had the power and influence and exercised the same to cause the unlawful offer and sale of SOL securities,” the suit noted.

The defendants have spent enormous sums to promote the native token in the United States since April 2020, which spiked SOL price to $258 and market value to $77 billion as of Nov. 5, 2021, the plaintiff claims.

Young also said that the owners made misleading statements regarding the supply and the decentralized nature of SOL. They claimed that both company insiders held some percentage of tokens.

Solana Price Analysis

Solana’s price has spiked to $37.82 at press time, after solid bullish signs. The token is up by 3.25% in the past 24 hours, with a trading volume of $1,268,616,214 and a live market cap of $ 13,015,291,467. SOL currently ranks at #9 in the cryptocurrency rankings.

The price of Solana crashed on Wednesday to the $33 mark but spiked soon after to $36, and the market continues a positive movement.

SOL price analysis has experienced a fluctuating movement in the past few days. However, with volatility closing, the value of Solana is less volatile to change. Per the SOL analysis, the cryptocurrency is expected to have a good time, with bulls taking the lead.