Solana is sued for violating the US securities law

The class action law firm Berger Montague announced it started legal proceedings against Solana on behalf of investors who purchased SOL tokens between March 24, 2020, and the present.

A stock photo of a judge gavel on the black table.

According to the firm’s press release published on July 12, Solana Labs and its co-defendants issued and sold SOL without registering the tokens with the U.S. Securities and Exchange Commission (SEC) as required under the federal securities laws.

The law firm also encouraged “anyone with non-public information regarding Solana Labs (..) to confidentially assist Berger Montague's investigation or take advantage of the SEC Whistleblower program.” The program would reward valuable whistleblowers with up to thirty percent of recoveries obtained from defendants by the SEC.

Earlier this month, a group of investors led by California resident Mark Young filed a lawsuit against Solana, accusing it of deliberately misleading them about SOL's total circulating supply and its decentralized nature. The defendants named in the lawsuit are Solana Labs and its CEO Anatoly Yakovenko, the Solana Foundation, Multicoin Capital Management LLC, Kyle Samani, and Falconx LLC.

Read also: Solana's Mad Lads NFT collection surpassed BAYC's sales

“Defendants made enormous profits through the sale of SOL securities to retail investors in the United States, in violation of the registration provisions of federal and state securities laws, and the investors have suffered enormous losses,” the document states.

SEC Chair Gary Gensler repeatedly emphasized that many tokens fall under the definition of security, clearing the path to more Ripple-style lawsuits.

“We need additional Congressional authorities to prevent transactions, products, and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector,” he claimed.