Polkadot Proposes Research to Ensure DOT Token is Not Classified as a Security

The Polkadot community is considering funding a study focused on shifting the classification of the DOT token from a security to a software asset.

Polkadot has announced that it achieved status for DOT as a token as of November 2022, a process the project attributes directly to three years of dialogue with the U.S. Securities and Exchange Commission (SEC).

Now, Polkadot is looking into funding a study to explore how to manage this achievement. The proposed research aims to provide guidance on the token status of DOT and the broader crypto ecosystem.

This move comes amid increasing regulatory scrutiny from the SEC and other regulatory bodies. Recent enforcement actions against stablecoin issuer Paxos and exchange Kraken this month have heightened concerns about potential intensified crackdowns on the crypto space.

The proposal requests 14,776.74 DOT, approximately $90,000, to fund the research. This grant will cover the work of team members and experts involved in the debate between token and security status, including some who have participated in Polkadot’s discussions with the SEC. The proposal suggests funding be disbursed in two installments of 7,388.37 DOT each.

However, despite Polkadot's previous claims of success in its interactions with the SEC, the regulatory body has not publicly confirmed any such regulatory approval. Consequently, on November 5, 2022, the Polkadot development organization, the Web3 Foundation, had to reiterate that DOT is not a security to further reassure investors.