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Is Solana Forking Due To The SEC War? Developer Weighs In

Bitcoinist

Bitcoin News / Bitcoinist 102 Views

There has been discussion about forking Solana, a blockchain platform that provides greater scalability in its fourth generation. However, an important developer has disclosed that the Solana Foundation and other programmers are not enthusiastic about this idea.

Developers Not Looking To Fork Solana?

In a report on June 14, the developer, Matías Kudelski, who also doubles up as a cyber-security expert who audited Solana’s code, said he works on one of the largest projects deployed on Solana. 

He observed that none of the developers were discussing the hard fork there. He also said that despite the community discussion around the hard fork, the Solana Foundation and most developers are not considering the move.

Last week, the United States Securities and Exchange Commission (SEC) said the native token of Solana, SOL, together with other coins, including Cardano’s ADA, Algorand’s ALGO, and more than ten others, were examples of unregistered securities. These examples were cited as the SEC filed legal actions against Binance and Coinbase, accusing them of operating unregistered exchanges.

In the United States, an unregistered crypto asset, like the regulator alleges SOL to be, is an asset that’s sold to the public without being registered with the agency. 

The agency also classifies the asset as a security since it allegedly complies with the stipulations of the Howey Test, among which the holder of the said asset, in this case, believes they made an investment of money and expect to make a profit from the efforts of others, that is, the development of the platform and other activities. 

Ordinarily, when a digital asset satisfies the Howey Test, it is categorized as a security. It requires registration with the SEC before being sold to the public in an initial coin offering (ICO) or any other crowdfunding option. 

Non-compliance with SEC registration requirements for securities may lead to potential civil and criminal consequences, a development the Solana community fears.

SOL’s Community Split

Should it proceed, the Solana community is still divided on how effective the hard fork will be. For instance, others cite the example of the Ethereum and Ethereum Classic hard fork, which saw stolen funds reversed and permitted the Vitalik Buterin-led chain to thrive. 

Beyond the possibility of success, they argue that the hard fork will break the chain from the Alameda Research grip. Alameda Research, the investment wing associated with the bankrupt FTX, holds 8.2% of the total SOL supply. Their holdings could eventually be unlocked and sold in the open market, heaping more pressure on SOL.

SOL Price On June 14| Source:SOLUSDT On Binance, TradingView

Meanwhile, some skeptics think a Solana hard fork would weaken the platform’s security and divide the community. They also add that even a hard fork won’t prevent the regulator from scrutinizing the blockchain in the future.


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