The cryptocurrency market has been thrown into a state of uncertainty as the Securities and Exchange Commission takes action against assets that may be classified as securities. Consequently, significant cryptocurrencies like Cardano (ADA), Solana (SOL), and Polygon (MATIC) have suffered significant losses, prompting concerns about their long-term viability.
Over the past 24 hours, these three cryptocurrencies have collectively plummeted by an average of 23% in value, resulting in a staggering capital outflow of $6.04 billion within a single day.
Cardano’s ADA is making headlines at a trading price of $0.24, showcasing a significant setback of 23.62% within a single day. This decentralized finance (DeFi) token has encountered a downward spiral, losing over 35% of its value over the past week.
Solana (SOL), holding the honorable position of being the 10th largest cryptocurrency in market capitalization, is facing a tumultuous period. The past 24 hours have seen a staggering drop of 21.81% for this digital asset, now valued at $14.64 in the trading arena. As if that weren’t enough, for the last seven days, SOL has witnessed a substantial decrease of 30%, leaving investors and enthusiasts in a state of concern.
Similarly, with a current trading price of $0.58, Polygon has undergone a 26% depreciation within a day. Its value has declined by over 35% over the past week.
SEC Lawsuits And Robinhood’s Announcement Compound The Plunge
The decline in these assets’ prices coincides with the Securities and Exchange Commission’s recent unveiling of two high-profile lawsuits against leading crypto exchanges Binance and Coinbase. These lawsuits focus on the listing of alleged unregistered securities.
In adherence to the regulations set forth by the Security and Exchange Commission (SEC), assets like ADA, MATIC, and SOL, which are either issued by foundations or companies or linked to protocols, are deemed as securities. The classification aligns with the laws outlined by the regulatory body.
Furthermore, the popular commission-free trading app Robinhood has announced its intention to cease support for ADA, MATIC, and SOL starting June 29. This decision has further exacerbated the downward trend.
The foundations behind ADA, SOL, and MATIC have vehemently disputed the Securities and Exchange Commission claims. The Solana Foundation, for instance, emphasized that SOL is not a security but rather a community-driven project reliant on decentralized engagement from users and developers.
Binance, in a recent blog post, expressed disappointment with the Securities and Exchange Commission lawsuit and emphasized its commitment to engaging in extensive good-faith discussions to reach a negotiated settlement and resolve the ongoing investigations.
In the face of regulatory action by the Securities and Exchange Commission, businesses often find themselves at a crossroads, having to make a critical decision: seek a resolution through settlement or engage in a legal battle within the court system. Drawing parallels to a notable event in December 2020, Ripple encountered a comparable circumstance when the Securities and Exchange Commission lodged a lawsuit against them. The allegation put forth by the regulatory body claimed that Ripple’s sale of the XRP token violated securities regulations by not registering it. Presently, the case remains active, keeping both parties in suspense as they await the crucial summary judgment that will determine the future trajectory of the dispute.