Jito Protocol Claims Its Token Is Not a Security
JitoSOL's classification as a non-security is outlined in a recent report from the Jito Foundation, inspired by changing regulatory perspectives.
The Solana infrastructure project, Jito, has publicly asserted that its main token, JitoSOL, is not classified as a security. The revelation might seem common for a crypto project that valuates its asset at $2.4 billion, but the way Jito communicated this stance is noteworthy.
The Jito Foundation published a comprehensive report titled “Securities Classification Report” that elaborates on why JitoSOL does not fall under the purview of the SEC. This document is a detailed take that typically is reserved for private advisory to clients in the legal field, now made accessible to the public.
According to industry insiders from Jito Labs, the project has felt more emboldened to express their views due to the evolving cryptocurrency landscape, especially following former President Donald Trump’s favorable perspective on crypto. The Jito Foundation aims to inspire other entities in the sector to take similar steps.
In statements from Lucas Bruder, CEO of Jito Labs, a sense of optimism reigns among developers, who are now more inclined to collaborate with regulatory entities to shape better rules for the industry. Bruder noted:
“There’s a lot of optimism right now from builders, and more willingness to try to work with regulators to create better rules for builders.”
The U.S. SEC has not alleged any legal violations by Jito in the past, and the new administration appears to be taking a more friendly approach. Jito’s report compares JitoSOL to the Howey Test, a framework used to determine if an asset is an investment contract. This aspect of the report suggests that the operation of JitoSOL is independent and purely technological.
Rebecca Rettig, legal counsel for Jito Labs, reinforced this by stating:
“The most important takeaway is this is pure technology.”
Moreover, the report touches on the pro-crypto sentiments radiating from the White House, warning that applying current federal securities law could endanger the viability of liquid-staking solutions like JitoSOL, contradicting the ambitions laid out in a recent executive order aimed at establishing the U.S. as a leader in the crypto sector.
