Solana Lawsuit: Dozens If Not Hundreds of Class Actions Might Likely Be Filed: CryptoLaw Founder

CryptoLaw founder John Deaton says dozens, if not hundreds, of class actions may likely get filed in the wake of Solana’s fresh lawsuit. 

Only the beginning if #XRP is deemed a security. Dozens if not hundreds of class actions will likely get filed – but not only ? the exchanges (@coinbase was sued already) but alleged promoter of an altcoin. @Ripple was sued already over #XRP – similar to #SOL below. ? https://t.co/ipf7bibh6E

— John E Deaton (205K Followers Beware Imposters) (@JohnEDeaton1) July 7, 2022

Solana Labs, the Solana Foundation, Anatoly Yakovenko of Solana, VC Firm Multicoin Capital, Kyle Samani of Multicoin, and trading desk FalconX are named in the potential class-action lawsuit brought by California citizen Mark Young, who claims to have purchased SOL in late summer 2021.

Young claims in the complaint that SOL was created and sold in a manner that satisfies all three criteria outlined in the Howey Test, a decision by the U.S. Supreme Court that is frequently used as a yardstick to determine whether or not a transaction involves the selling of securities. 

The lawsuit also alleged that Multicoin, a major cryptocurrency venture capital firm that has made significant investments in the Solana ecosystem, “offloaded millions of SOL” onto retail after “relentlessly” promoting the token despite the Solana blockchain’s technical difficulties.

XRP lawsuit

The CryptoLaw founder believes this might be just the beginning if XRP loses its lawsuit against the SEC. The regulator had filed an action against Ripple Labs Inc. and two of its executives in December 2020, alleging they raised over $1.3 billion through an unregistered, digital asset securities offering.

The answer to Jason’s question is an easy one. The SEC’s argument regarding #XRP makes #XRP by far the most important altcoin in crypto. The SEC is alleging that today’s #XRP – the token itself – is a security, including secondary market sales – independent of @Ripple. https://t.co/gbSiwSEDKX

— John E Deaton (205K Followers Beware Imposters) (@JohnEDeaton1) July 7, 2022

The complaint alleges that Ripple raised funds, beginning in 2013, through the sale of digital assets known as XRP in an unregistered security offering to investors in the U.S. and worldwide.

John Deaton believes that the SEC’s argument regarding XRP makes it by far the “most important altcoin in crypto” and might potentially determine whether the SEC possesses jurisdiction over the existing altcoins that have traded for years.

He added, “It’s the functional equivalent of claiming the oranges or groves in Howey were securities. If successful, then almost every other altcoin is a security.”