Solana Labs, the non-profit organization behind the Solana blockchain, has been hit by a class-action lawsuit filed in California.

Among the defendants was the well-known venture capital firm Multicoin Capital and its CEO Kyle Samani, one of Solana’s most ardent supporters.

The lawsuit could have huge ramifications for the cryptocurrency industry especially after Mark Young, the lead plaintiff, claimed that SOL is an unregistered security.

The lawsuit states that the defendants spent huge sums of money to promote Solana’s securities.

Accordingly, the plaintiffs expected a profit from the investment in Solana based on the marketing efforts of the Solana Corporation.

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The SOL cryptocurrency meets all the hallmarks of a security token under the Howey test as the project’s success and potential returns depend on Solana’s ability to deliver on its promise to create the network.

The defendants named in the lawsuit, according to the lawsuit, personally benefited by urging investors to buy SOL on several online platforms.

Young claims that they were able to make huge profits with the help of SOL cryptocurrency.

Young accused Solana Labs of intentionally making misleading statements about SOL’s publicly traded offering of securities.

According to the plaintiff also the Solana blockchain is not decentralized (unlike the public statements of the defendants).

Young wants the court to order him and the other class members to pay damages in an amount that will be proven at trial.

SOL, despite being one of the best performing cryptocurrencies for 2021, is now down more than 85% from its high of $259.

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