How did that happen? Well, it’s all thanks, no thanks to the SEC's relentless pressure. The SEC has been on a roll, slapping the "security" label on tokens left and right, and now, it is aiming at Binance and Coinbase too. 

Robinhood decided to play it safe and delist SOL and those other "securities." Not surprising - Robinhood has kept a low profile since FTX collapsed in November. Sam Bankman-Fried bought them out with what was probably customer funds; it makes sense they’d remove anything that brings regulatory scrutiny. 

But do SOL investors have anything to worry about?

TL;DR:📃

• Solana's SOL got kicked off Robinhood thanks to the SEC's "security" label. 
• SEC's labelling of SOL seems random, and the Solana Foundation says, “Nope.”
• Could a hard fork save Solana from SEC’s trouble? It is complicated. 
• Worst case: SOL gets booted from more exchanges, and the price takes a nosedive. 
• Base case: Market vibes aren't great, so SOL might see more downward action. 
• Best case: Ignore the SEC drama, and SOL recovers.
• Bottomline, Solana’s future shines brighter than a disco ball. Outdated laws can't stop it!

Disclaimer: Not financial or investment advice. Any capital-related decisions you make are your full responsibility.

Solana delisted⛔

Robinhood has delisted Solana to comply with the SEC’s recent classification of SOL as a security. But why is SOL all of a sudden branded security? One simple line in the Binance lawsuit:

Strange - without justification, the SEC has just picked a handful of crypto assets, said they’re securities and used them as ammunition against Binance. It's like they played a quick game of "Eeny, meany, miny, moe", and BAM! SOL and others were in their sights. 

Talk about arbitrary decision-making. Remember when Gensler had no opinion on whether Ethereum was a security? 

This was just weeks ago - interesting that all of a sudden, he’s been able to pick out securities…

However, the filing happened, and the sudden labelling of SOL as security caused quite a ruckus. Last week, Solana dumped around 29%, wiping $2 billion off the market cap. 

Yet, the Robinhood delisting is not a major issue in the grand scheme. Why?

There’s not a lot of SOL on Robinhood.

Around 3 million SOL, give or take. This represents roughly 0.75% of the circulating supply. So, not a huge deal, but enough to cause a bit of a panic. That's like finding a single french fry in a jumbo-sized bucket of popcorn. It's not a lot, but it's enough to make us sweat a little.

The Robinhood delisting will occur on the 27th of June. Any SOL holders on the platform at that moment will witness their assets being swiftly sold off in the market. We recommend removing any SOL from the Robinhood platform before then to avoid headaches and heartaches. 

The SEC’s argument stems from SOL being sold privately through a SAFT agreement. That made SOL a security - at that moment, in time. This is the same argument used for all the assets listed in the filing above. While this is true, SOL was technically a security at that time; this is no longer the case…

Solana Foundation disagrees with SEC😠

But anyways, the Solana Foundation hit out at the SEC’s classification. They're not buying into the whole "SOL is a security" argument, no ser! 

But hey, let's not just take their word for it. Let's dive into the juicy details straight from the mouth of our favourite regulatory superstar, Gensler. 

Here, he’s outlining his belief that ETH is a security based on the Howey Test. This relates to SOL:

1. Is it an investment of money or assets?✔️
   • SOL was, as it was sold to private investors through an investment contract (a SAFT).
2. Is the investment in a common enterprise?❓
   • A grey area - the Solana Foundation initially handled the funds. But is that still the case now?  
3. Is there a reasonable expectation of profits?✔️
   • Yes, there was and still is - most people buy SOL as an investment. 
4. Is it reliant on the efforts of a promoter or others?✔️
   • Yes, investors relied on and still rely on developers to build the chain and marketers to market.

Passing the Howey Test requires a big fat yes for all four questions. This means that an asset is a security. But SOL doesn’t completely pass - there’s a nuance. SOL is sufficiently decentralised nowadays to fail on question two.

Now, here's the million-dollar question: Can the SEC classify an asset as a security based on its past, even if the asset no longer fits the security criteria? Boom! That's the pickle the SEC is facing right now. 

And for the Solana community, is there a way to “rewrite” that history so that SOL cannot be classed as a security? It's like trying to erase an embarrassing middle school photo from the yearbook. Tricky business!

However, the Solana community believes there’s only one way to find out…

To fork or not to fork🍴

A hard fork could be one solution to the SEC problem. A fork would essentially “reset” SOL and free the token from SEC scrutiny. However, that wasn’t the main point of the discussion. Initially, the fork was designed to rid Solana of the upcoming selling pressure from FTX/Alameda’s SOL liquidations.

Alameda holds around 8.2% of the entire SOL supply. Although locked till around mid-2025, this is a significant pain in the Solana community’s backside.

Now, here’s where things get interesting. These tokens will be sold as soon as they become available.

That means we are talking about 3+ years of continuous selling pressure. The Solana community will feel the heat; their brows are starting to furrow like Eskimos thrown smack dab in the middle of the Sahara desert.

Some brilliant minds have already devised a plan to solve the Alameda problem – let's fork Solana and give Alameda the boot! It sounds like a deliciously rebellious plan. Like kicking your annoying neighbour out of the neighbourhood potluck party. 

But is it really that easy?

Let’s take a quick trip down memory lane. Ethereum was forked early in its development history in 2016 to revert an exploit, and voila,  Ethereum Classic (ETC) was born. Solana is pretty early in its history, and there is a big threat if regulatory developments continue down this route. 

So, there is precedent here. 

But in the case of Solana, it sets a dangerous precedent. How can future investors trust an investment if the community can wipe out their stake by forking the chain? Which other chains will use a Solana fork as a precedent to do the same with their ecosystem?

Also, the logistics of a fork are more complicated now. There’s no guarantee that CEXs or stablecoin providers like Tether and Circle would support a Solana fork. 

There are too many questions to be answered for a fork to happen in the near future. However, it is always an option if the SEC and/or Alameda stake become an existential threat to Solana. 

For now, the prospects of a fork remain purely theoretical. It's out there, but we're not quite ready to take the plunge just yet.

So where is SOL at right now?

SOL to $0 or the moon? 🤔

Worst case

SOL is delisted from multiple exchanges after SEC's statements regarding its classification as a security. This would significantly impact SOL price, pushing it to new yearly lows.

SOL bottoms at ~$8.

Base case

Nothing crazy happens on the fundamentals front, and no other exchanges delist SOL. However, given the overall sentiment looming on the market, SOL price will likely see a bit more downside.

SOL bottoms at $12.25

Best case

Upside is seen across the board as the market ignores the SEC, and SOL prepares to return to the $19 - $22 region. The market isn't in the best shape right now, so this upward movement would primarily benefit short-term traders.

SOL bottoms at $15 (current price).

--------------

Personal conviction levels based on technicals alone:

Worst case - 3%

Base case - 70%

Best case - 27%

Cryptonary’s take🧠

Here's the deal—we believe Solana's future shines brighter than a disco ball at a Saturday night party. We think this latest round of FUD will blow over as Solana’s recent developments are too positive to ignore.

There may have been a few hiccups with the SEC, FTX, and stuff, but even superheroes sometimes trip over their capes. And if Solana can survive FTX, it can survive the SEC. Of course, those guys may be tough, but Solana has proven it's made of sturdier stuff. 

Expanding on this, there are still too many unanswered questions for the SEC to label any of the mentioned assets as securities definitively. Those assets, including SOL, are unfortunate victims of the crossfire in the SEC’s attack on CEXs. 

Yes, the exchanges probably facilitated trading unregistered securities (early crypto projects). 

But on an asset-by-asset basis, more clarity is required, and Gensler needs to answer what makes a crypto, security definitively. 

We don’t think he’ll be able to anytime soon.

SOL might have been a security at one point, but it certainly isn’t now.  The Howey Test, bless its ancient heart, was created way back when folks were still listening to big band music and sporting those nifty suspenders. But we're not living in the 1930s anymore.

And that’s the point - applying 90-year-old laws to crypto is illogical, at best.

And malicious at worst.

As usual, thanks for reading. Cryptonary, out!