Mark Young, a token investor, has filed a class-action lawsuit in California against Solana (SOL) layer-1 blockchain.
The accusations involve charges of making money from the sale of unregistered securities by the network’s creator, partners, and founder.
The sale of unregistered security resulted in profits for the Solana Foundation, Anatoly Yakovenko, Solana Labs, Multicoin Capital, and FalconX, claims the court filing.
Between August and September 2021, Mark Young purchased Solana (SOL). However, he quickly learned that the token was unregistered security that caused significant losses for American retail investors.
According to the complaint, the defendants including Multicoin Capital advertised the tokens after purchasing them in 2019 for $0.4 and profitably sold millions of Solana (SOL) to retail investors. FalconX is charged with helping Multicoin Capital dump Solana (SOL) tokens.
During the crypto market bull run in November 2021, Solana (SOL) had its peak price of $258. This was made possible, according to the lawsuit, because of the defendants’ activities, and they benefited from the enormous increase in value while the typical investor suffered losses.
Solana’s (SOL) decentralized status as well, was contested in the 40-page lawsuit.
As of May 2021, insiders had 48% of Solana’s (SOL) entire supply while the Solana Foundation held 13%, making it a highly concentrated company, according to the lawsuit.
“Because Solana Labs and its insiders directly control more than 50% of the total SOL supply significantly, the underlying value of SOL depends primarily on the efforts taken by Defendants.”
The lawsuit also claimed that Solana (SOL) is centralized because of its frequent network disruptions.
Solana (SOL) has not yet addressed the lawsuit as of the time of publication.