Spottedin an unusual tweet, declared that the DOT token, although marketed as a security, was no longer a security. Instead, it had turned into software.
The native Polkadot (DOT) token, originally offered, sold and delivered to buyers as a security, has morphed and is no longer a security. It’s software. https://t.co/uv8wc1DbNb
— Polkadot (@Polkadot) November 4, 2022
In recent months, the crypto industry has been flooded with uncertainty due to the regulatory body’s hazy views on cryptocurrencies. In some cases, such as that between the Security and Exchange Commission (SEC) and XRP, this sparked a full-scale legal battle. While in others it has caused projects to reassess their strategies.
Perhaps realizing that the SEC might not understand, the Web3 Foundation issued a public statement stating that POINT was not a security. But what do they attribute this conclusion to?
Can the SEC hear us?
The Web3 Foundation recognized in a long statement that they knew that any coins issued to investors would be securities. However, they were able to put in place the structures that allowed the DOT token to turn into software. This was done through a number of meetings with the SEC.
In particular, the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub). The items originally sold and the items that would be traded had undergone this transformation.
Proponents of crypto assets have often cited the Hinman’s speech as proof that cryptocurrencies are not securities. However, the statements of Jay Clayton and Gary GenslerPast and current SEC chairmen were at odds with each other.
The Howey test was another method for determining whether or not an asset was a security. However, its application has been disputed in the past. Given this, would future SEC administrations agree with Polkadot’s assertion?
bullish DOT
A surge in the price of the DOT token indicated that it seemed to be responding favorably to the most recent announcement. On Nov. 4, the asset rose almost 10%, according to a daily DOT timeframe analysis. It had lost less than 1% of its prior gains and was trading at around $7 as of November 5.
Although a new support line appeared to form around the $6.2 area, support was still mostly located between $6.1 and $5.5. On the daily time frame, the short MA, represented by the yellow line, had also moved from resistance to support.
The Relative Strength Index (RSI) line had crossed the neutral line due to the recent price rally, as we could see. This meant that at the time of this writing, the general trend for DOT was bullish.
Clear guidance needed
Thousands of cryptocurrencies are currently active, with many more coming online. Investors would be able to clearly identify the asset classes they invest in and the assets they should avoid with a better regulatory framework.
Moreover, it could make it easier to identify questionable companies and attract more institutional investors to invest in the market.
This article first appeared on AMBCrypto
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