Agency Explains Why Certain Crypto Are Securities
One of the #tokens in question is $MATIC , the native token of Polygon, an Ethereum scaling blockchain platform. Moreover, Polygon positions MATIC as essential for network #transactions and governance, incentivizing holders through staking mechanisms and other economic activities.
Hence, the SEC contends that since its inception, MATIC has been marketed and sold as an investment vehicle. It mentions that investors expect an increase in MATIC value driven by Polygon’s ongoing development and expansion efforts. They highlighted the details on MATIC’s whitepaper to prove their point.
The whitepaper read, “Matic Tokens are expected to provide economic incentives on the Matic Network [now Polygon]…Without Matic Tokens, there is no incentive for users to expend resources to participate in activities or provide services to the overall ecosystem on the Matic Network.”
Polygon also revealed funding raised from renowned and celebrity investors. In addition, Sandeep Nailwal, co-founder of Polygon, wrote in a November 2022 tweet, “I won’t rest until Polygon gets the ‘top 3’ spot it deserves (alongside $BTC and ETH). No other project comes close.” The marketing and statements by the co-founder has also influenced the SEC’s decision.
Similarly, MANA, the digital currency of Decentraland, a virtual reality platform on Ethereum, has been categorized as a security by the SEC. MANA facilitates transactions within the Decentraland ecosystem and grants holders rights to participate in governance and content creation.
The SEC pinpointed the sale of $MANA tokens during its ICO and subsequent trading activities on platforms like #Metamask Swaps. Moreover, the agency noted that these activities were conducted with the implicit understanding of potential profit from Decentraland’s platform growth and adoption.
