Polka dotin an out-of-the-ordinary tweet, listed that the DOT token, despite being marketed as a security, was no longer a security. Instead, it had turned into a software.
Originally offered, sold and delivered to buyers as a security, Polkadot’s native token (DOT) has changed and is no longer a security. It’s software. https://t.co/uv8wc1DbNb
— Polkadot (@Polkadot) November 4, 2022
In recent months, the crypto industry has been awash in uncertainty due to the regulatory body’s murky views surrounding cryptocurrencies. In some cases, like the one between Security and Exchange Commission (SEC) and XRP, this sparked a full-scale legal battle. While in other cases it has caused projects to reassess their strategies.
Maybe the SEC didn’t realize it didn’t catch that the Web3 Foundation issued a public statement declaring that DOT was not a security. However, to what do they attribute this conclusion?
Here is AMBCrypto’s Price prediction for Polkadot [DOT] for 2022-2023
Can the SEC hear us?
The Web3 Foundation recognized in a long statement that they were aware that all coins given to investors would be securities. However, they were able to set up the structures that allowed the DOT token to turn into software. This was done through a series of meetings with the SEC.
In particular, the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub). Both the goods that were originally sold and the goods that would be exchanged had undergone this transformation.
Proponents of cryptoassets have often quoted Hinman speech as proof that cryptocurrencies are not securities. Still, opinions are from Jay Clayton and Gary Genslerpast and present chairmen of the SEC were at odds with each other.
The Howey test was another method of determining whether an asset was a security or not. However, its application has previously been contested. Considering these, would future SEC administrations agree with Polkadot’s contention?
An increase in the price of the DOT token indicated that it seemed to be reacting positively to the latest announcement. On Nov. 4, the asset rose nearly 10%, according to a daily timeframe analysis from the DOT. It had lost less than 1% of its previous gains and was trading at around $7 a share. November 5.
Although a new support line appeared to be forming around the $6.2 area, support was still mostly located between $6.1 and $5.5. On the daily time frame, the short MA, represented by the yellow line, had also changed from resistance to support.
The Relative Strength Index (RSI) line had crossed the neutral line due to the recent price rally as seen. This meant that at the time of writing, the overall trend for DOT was bullish.
A clear direction is needed
Thousands of cryptocurrencies are currently active and many more are in the process of going live. Investors will be able to clearly identify the asset classes they invest in and the assets they should avoid with a better regulatory framework.
In addition, it can make it easier to identify questionable ventures and inspire more institutional investors to invest in the market.