One of the Solana investors Mark Young has sued Solana Foundation and other Solana-related ventures for selling unregistered securities token SOL from March 24, 2020, onwards. On behalf of the plaintiff, the class action lawsuit was filed by Roche Freedman LLP and Schneider Wallace Cottrell Konecky on July 1 in the district court of Northern California.
The lawsuit summons Solana Labs, Solana Foundation, Anatoly Yakovenko, Multicoin Capital management, Kyle Samani, and FalconX for selling the native token SOL of the Solana blockchain unregistered directly. According to the reports, Anatoly supplied around 11.3 billion SOL tokens to a market maker in April 2020 without disclosing the information in public. However, the firm took the decision to reduce the SOL supply by the same amount through a burning mechanism. Unfortunately, only 3.3 million tokens were burnt, as reported in the lawsuit claims.
Mark Young, the main plaintiff also accuses Solana of being ‘highly centralized’. According to reports in the lawsuit claims, ‘the insider of the Solana Team held 48% of the total SOL supply, as of May 2021’.
The filing also addresses the three forks of the Howey test. The retail investors who invested in SOL and other services by Solana have been expecting reasonable profit margins from the efforts of Solana Labs and Solana Foundation. It was highly anticipated that the Solana blockchain network will work against all the odds of the Bitcoin and Ethereum framework for better transactions and lower gas fees on the blockchain.
SOL token prices and trading volumes
Moreover, the crypto venture capital ‘Multicoin’ which heavily invested in the Solana ecosystem, has offloaded millions of dollars of SOL in the retail market. Before this act, Multicoin promoted the native token SOL relentlessly despite of Solana tech issues.
Currently, Solana is also going with some reliability woes. The network has had at least seven full or partial outages over the last 12 months. As said in the filing, these outages have resulted in ‘major losses for network users’. It has severely caused SOL a dramatic fall in prices and trading volumes in the entire crypto market.
As per CoinMarketCap data, SOL is trending at $37.58. The 24-hour trading volume depicts a volume of $1.3 billion. The SOL price is up by 2.24% in the last 24 hours. According to the site ranking, Solana’s native token SOL ranks 9th in the crypto market with a market capitalization of $12.9 billion.