The one-of-a-kind transformation was done in collaboration with the US Securities and Exchange Commission (SEC) and is the result of comprehensive discussions that the company has initiated with the SEC over the past three years.
Schoenberger took to Twitter to describe DOT's transformation into legitimate software as "a landmark step towards the achievement of Web 3.0."
DOT transforms into software
Polkadot's DOT token, initially offered, sold, and delivered to buyers as a security, has been transformed into software.
The Web3 Foundation, the company responsible for running Kusama and Polkadot blockchains, announced DOT's new transformation, announcing that the token will no longer be offered as securities to interested users and buyers.
The statement further reads:
Upon its third anniversary of proactive engagement with the SEC, the Web3 Foundation today announces a landmark step towards the achievement of Web 3.0, a decentralized, trustless, serverless internet. The Polkadot blockchain’s native token (DOT), initially offered, sold, and delivered to purchasers as a security, has morphed and is no longer a security. It is software.
In a new blog post, Daniel Schoenberger, Chief Legal Officer of Web3 Foundation, revealed how the company engaged with the SEC's FinHub staff on multiple occasions over the course of three years to develop a "workable theory of how token morphing could be achieved."
The decision to morph DOT into software will help Polkadot evade the SEC's growing regulatory interests in the crypto market.
In recent years, the SEC has adopted a stringent stance on cryptocurrencies, claiming that all digital crypto assets are, in fact, securities.
The rising regulatory intervention has compelled several crypto companies to think of creative solutions that can help them navigate the new regulatory regime.
Schoenberger also shared how his engagement with the SEC has been "positive so far," claiming that the SEC has welcomed meetings with the foundation to help carve out a workable solution.