The Web3 Foundation announces that the Polkadot Blockchain (DOT) native token has been transformed and is now software. The Web3 Foundation announces an important step towards the realization of Web 3.0. A decentralized internet, without a trusted third party and without a server. The native blockchain Polkadot (DOT) token, originally offered, sold and delivered to buyers as security, has evolved and is no longer a security. It’s software now.
The regulatory context for the Web3 Foundation
This announcement marks the third anniversary of the Web3 Foundation’s first partnership with the U.S. Securities and Exchange Commission (“SEC”) Strategic Hub for Financial Innovation (“FinHub”). In November 2019, the regulatory environment for digital assets was tense. When the Web3 Foundation approached FinHub, the SEC had recently filed a lawsuit against Telegram. In addition, the FinHub staff’s “Investment Contract” Analysis Framework (the “Framework”) had been released only a few months earlier. Numerous other SEC enforcement actions and announcements were revealed in the aftermath. Examples include his Investigative Report 21A: The DAO (“the DAO Report”), the Munchee Cease and Desist Order, and the Kik Decision.
Daniel Schoenberger is the legal director of the Web3 Foundation. He said The Framework suggests that nearly all digital assets that were initially offered and sold for fundraising purposes likely formed a security when delivered to the first buyers. However, the framework also contains another way forward. This would make it possible to later revalue a digital asset that was initially offered and sold as collateral. For purposes of U.S. federal securities law, it may no longer be a security.
Relations between the Web3 Foundation and the SEC
The Web3 Foundation funds research and development teams building the decentralized web technology stack, with the official mission of advancing the vision of Web 3.0.
For the next three years, the Web3 Foundation met regularly with the SEC. It has sought to innovate and comply with US federal securities laws. In particular, this compliance work focused on offering, selling, marketing and delivering to first buyers as collateral.
According to the Web3 Foundation, current DOT offerings and sales are not corporate actions. The use of DAT will continue for the purposes for which it was designed, which include providing and securing parachains and facilitating on-chain governance. Control of the Polkadot network has long been in the hands of DOT holders. According to Mr. Schoenönberger, the DOT is not a title. It’s software.
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Against the angelicism of the advocates of the current monetary system, I am against DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.