Polkadot Crypto DOT is no longer security: “Token has changed”

Daniel Schoenberger, Legal Officer of the Web3 Foundation, a non-profit organization behind the development of the Polkadot (DOT) and Kusama (KSM) platforms, shares an important update on the DOT token status.

The DOT token is software, not security: W3F

In a publication shared by the W3F main blog yesterday, November 4, 2022, Schoenberger announced that Polkadot’s token DOT has changed and is no longer a security.

The Web3 Foundation announces @Polkadotits original token DOT has changed and is software, not a security!

After 3 years of proactive engagement with @SECGovW3F announces a landmark step toward the achievement of Web 3.0, a decentralized, trustless, serverless Internet.

— Web3 Foundation (@Web3foundation) 4 November 2022

According to his statement, the representatives of W3F spent almost three years in discussions with the US Securities and Exchange Commission (SEC). They worked to make the DOT status and use consistent with all the requirements of the “Investment Contract” analysis framework of digital assets by the SEC’s Financial Hub.

Ideologically, this policy tested the proactive approach in the interaction between cryptocurrency projects and regulators in the United States. Three years of conversations between entrepreneurs and watchdogs were groundbreaking for this way of talking:

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As we saw it, the stakes were high, and the margin for error was small. Whatever it took for DOT, the original token of the Polkadot blockchain to be – or become – a non-security, we were willing to do it. And so we decided to try to take the SEC’s FinHub staff up on their offer to “come in and talk to us.”

Over the past three years, the role and functionality of the DOT has changed, or “transformed”. As such, by November 2022, the token is no longer a security: it just looks like “software”.

As covered by U.Today in the past, the US has the strictest laws when it comes to unregistered securities offerings. Numerous cryptocurrency heavyweights including Ripple, FTX and Celsius were under fire due to the unclear statuses of their cryptos.

Former Acala (ACA) Director: BTC, DOT are the only cryptos that are not securities. Is this true?

The polkadot community (DOT) welcomed the announcement from Schoenberger. Robinson Burkey, former director of growth for Polkadot’s DeFi hub Acala Network, highlighted that DOT is the first-ever altcoin with such an impressive status.

$BTC and now $POINT are now the only cryptoassets that are not considered securities

I have to imagine the days @Polkadot falling into the background on CT is no longer, this is BIG

Kudos to @Web3foundation in being proactive and working with @SECGov

— Robinson Burkey (@RobinsonBurkey) 4 November 2022

Meanwhile, his statement was criticized by aggressive “soldiers” of the XRP army: they emphasized that the SEC did not confirm the non-security status of DOT.

Some of his followers also recalled that back in 2020, Blockstack PBC filed a Form 1-U report with the SEC to confirm that Stack’s (STX) token was not a security.