Altcoin of Polkadot (DOT) The Web3 Foundation, which funded its development, said that the blockchain token in question should no longer be considered a regulated security by the U.S. Securities and Exchange Commission (SEC).
“The Polkadot Altcoin Is No Longer a Security, It’s Software”
Chief Legal Officer Daniel Schoenberger wrote in a blog post, “DOT, the native altcoin of the Polkadot blockchain, has now changed shape and is no longer a security. This is software.” said.
Schoenberger said the foundation has been working with the SEC for three years as it sought a way that could allow a digital asset initially offered as a security to be revalued at a later date.
The conversion will be similar to other SAFTS (Simple Agreements for Future Tokens), a legal structure that distances the tokens themselves from that sale while selling investment contracts for future tokens as a security.
This regulatory protection had become a pressing concern following the landmark DAO Report in July 2017 from the SEC that said an ICO could be a security offering and thus require registration.
Referring to the “spirit of open communication and dialogue” with the SEC, Schoenberger said:
“The risks were high and the margin of error was very small. We were ready to do whatever it took to make DOT, the native token of the Polkadot blockchain, a non-security asset.”
Doubts remain as to whether the current SEC believes SAFTS can truly decentralize.
*Not investment advice.
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