IOG, the development company behind Cardano, has rejected the SEC’s allegations that ADA is a security under U.S. laws.
The company has stated that the SEC’s lawsuits against Binance and Coinbase, which listed ADA among other tokens, contained factual inaccuracies and did not affect its operations.
IOG also emphasized its commitment to collaborating with regulators to develop frameworks that protect consumers and foster innovation in the blockchain industry.
IOG’s Response to the SEC’s Lawsuits
IOG, formerly known as Input Output Hong Kong (IOHK), is the research and development company that created Cardano. A blockchain platform aims to provide smart contracts, decentralized applications, and interoperability.
Cardano’s native token is ADA, which is currently the fifth-largest cryptocurrency by market capitalization.
On June 7, IOG published a blog post in response to the U.S. Securities and Exchange Commission (SEC) ‘s lawsuits against Binance and Coinbase.
The SEC accused both exchanges of violating securities laws by offering U.S. investors unregistered securities, derivatives, and staking services.
ADA was among the tokens the SEC considered to be securities named in its lawsuits, and the SEC alleged that IOG sold and offered ADA as an unregistered security through an initial coin offering (ICO) between 2015 and 2017.
IOG dismissed the SEC’s allegations as “numerous factual inaccuracies” and said that ADA was not a security under U.S. laws. The company said ADA was never offered or sold through an ICO but rather through pre-sales to Cardano’s early supporters.
IOG also said that a centralized entity or authority did not control ADA but rather a decentralized network of validators, developers, and end users.
According to the company, ADA holders had no ownership or profit-sharing rights in IOG or Cardano but used ADA as a utility token to access the network’s services.
IOG said that the SEC’s lawsuits did not affect its operations or plans to launch new features on Cardano, such as smart contracts and decentralized applications.
The company also said it was committed to working with regulators to develop frameworks that protect consumers and foster innovation in the blockchain industry.
Emphasis on Decentralization and Innovation
IOG said that the SEC’s lawsuits demonstrate the need for the regulator to understand how decentralized blockchains operate and how they differ from traditional securities.
The company stated that regulation through enforcement actions is needed to provide clarity to the blockchain industry or consumers.
IOG said it welcomes cross-industry collaborations with regulators to help create responsible legislation that would not stifle community innovation by building decentralized protocols.
Furthermore, the company said it supported transparency, accountability, and consumer protection in the crypto space.
IOG also highlighted its achievements and contributions to the blockchain industry, such as:
- Developing Cardano as an open-source project based on peer-reviewed research and scientific methods
- Launching Alonzo, a major upgrade that enabled smart contracts and decentralized applications on Cardano
- Supporting various social impact initiatives in Africa, such as digital identity solutions and education programs
- Collaborating with academic institutions, industry partners, and government agencies to advance blockchain research and adoption
IOG said that it was proud of its work and vision for Cardano and would continue to deliver value and innovation to its global community of users.
