Solana Labs and key players in the Solana ecosystem were hit with a lawsuit on July 1 in California federal court.
The class-action lawsuit was filed by Roche Freedman LLP and Schneider Wallace Cottrell Konecky in the district court for the northern district of California on behalf of plaintiff Mark Young, a resident of the state, and all investors who bought SOL tokens from March 24, 2020, through the present.
The lawsuit accused Solana Labs, the Solana Foundation, Anatoly Yakovenko, prominent crypto venture capital firm Multicoin Capital Management, and its CEO Kyle Samani, as well as trading platform FalconX of making illegal profits from what it claims to be an unregistered security.
“Defendants made enormous profits through the sale of 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.”
Young had reportedly purchased an undisclosed amount of SOL in August and September 2021.
The plaintiff has accused Anatoly Yakovenko, the CEO of Solana Labs, of making deliberately misleading statements concerning the total circulating supply of the token.
If SOL is deemed to be a security, Coinbase, Binance, and other prominent crypto exchanges could come under the regulator’s radar for listing similar tokens.
It could also lead to many exchanges ultimately removing SOL, a case similar to that of Ripple when XRP was delisted from many platforms after the SEC sued the blockchain firm.