A top executive of the development team behind Polkadot (DOT) is asserting to the U.S. Securities and Exchange Commission (SEC) that the interoperability blockchain’s native token no longer counts as a security.
In a new blog post, Daniel Schoenberger, the Web3 Foundation’s chief legal officer, tells the SEC that DOT has transformed from a security into software and no longer falls under the regulatory agency’s jurisdiction.
“Over the years, we have developed what we believe is a workable theory of how token morphing may be achieved for an increasingly decentralized project, like Polkadot, and a digital asset that, other than having been offered and sold initially for fundraising purposes, does not, itself, bear security-like characteristics. We have shared this theory many times with the SEC…
Consistent with the views that we have shared with the SEC staff, we are pleased to announce that DOT, the native digital asset of the Polkadot blockchain, has morphed. In our view, current day offers and sales of DOT are not securities transactions, and DOT is not a security. It is merely software.”
Schoenberger says that while DOT could have been considered a security at first, the team behind it made sure they did everything they could to morph it, including talking with the SEC.
“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 [Strategic Hub for Innovation and Financial Technology] staff up on the offer to ‘come in and talk to us.’”
The executive goes on to say that the SEC was open and willing to communicate, leading the Web3 Foundation to create solutions to the issues the regulatory agency may have had about DOT’s transformation.
“Our experience has been a positive one. The SEC has welcomed meetings with the Web3 Foundation, and there has been a spirit of open communication and dialogue. Those ongoing interactions have given us a deeper understanding of some of the SEC’s concerns and have helped us to develop solutions to address them.”
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