Analysis Implications of SECs Ethereum Investigation for Solana Investors

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NAIROBI (CoinChapter.com) — The recent conclusion of the U.S. Securities and Exchange Commission’s (SEC) investigation into Ethereum has raised concerns about the regulatory status of other proof-of-stake (PoS) cryptocurrencies like Solana.
Ethereum’s SEC Triumph: Implications for SOL and Other PoS Cryptos
The SEC’s decision to end its scrutiny of Ethereum is seen by many as a sign that ETH is not considered a security. This has led to a surge in Ethereum and other alternative coins. However, legal experts advise against drawing broad conclusions about other PoS cryptocurrencies based solely on Ethereum’s outcome.
Marc Fagel, a former SEC official, has noted that the specific defenses used in Ethereum’s case may not be applicable to other PoS networks. He emphasized that the regulatory treatment of networks like Solana, Cardano, and Polygon will depend on their unique circumstances, such as token creation and distribution processes.
Attorney Drew Hinkes has stated that the SEC’s closure of the Ethereum investigation does not necessarily provide regulatory clarity for other PoS cryptocurrencies. The factors that led to the SEC’s decision on Ethereum are specific to that case and may not be present for Solana or other tokens. Hinkes stressed the importance of regulatory clarity in order to promote market stability and investor confidence.
Why Solana Investors Should Proceed with Caution
The classification of certain tokens as securities by the SEC has significant implications. If Solana were to be classified as a security, it would be subject to extensive regulatory oversight. This would require compliance with strict reporting and operational standards, potentially affecting its trading and accessibility.
The price of Solana reacted negatively to the SEC’s actions against Binance and Coinbase, which included SOL among other tokens. This demonstrates the market’s sensitivity to regulatory news and the potential volatility that may follow similar announcements.
The Solana Foundation has strongly disputed the characterization of SOL as a security, emphasizing its role as the native token of a decentralized blockchain. However, this stance does not eliminate the possibility of future regulatory challenges.


SOL/USD 1-day price chart. Source:
TradingView
The SOL/USD chart indicates a downtrend, with SOL currently trading at $131.59, representing a 1.42% decrease. The 50-day EMA is at $154.32, and the 200-day EMA is at $130.01, suggesting potential resistance and support levels. The Relative Strength Index (RSI) stands at 32.78, indicating that SOL is approaching oversold territory.
If the SEC determines that SOL is a security, exchanges may face restrictions or choose to delist the token to avoid regulatory complications. This could result in reduced liquidity and trading volume for SOL, impacting investor confidence and market stability. Additionally, classifying Solana as a security would provide enhanced investor protections but also expose the project to potential legal challenges.