Cardano, Solana, and Algorand Plummet to New Lows
While the SEC’s designation of some cryptocurrencies as securities has shaken the market, the development companies behind these assets have strongly rejected the regulator’s characterization.
The United States Securities and Exchange Commission’s (SEC) lawsuit against Binance and Coinbase has resulted in widespread volatility in the crypto market.
As part of its legal actions, the regulator identified 19 new cryptocurrencies as securities. According to the SEC, “Coinbase makes these crypto assets available for trading without restricting transactions to those who might treat the asset as anything other than as an investment.”
Market Turmoil as Securities Designation Takes Effect
Following the classification, several of these digital assets experienced a sharp decline, hitting their lowest prices to date. These assets include Cardano (ADA), Solana (SOL), Algorand (ALGO), Polygon (MATIC), and Filecoin (FIL) to name a few.
According to CoinGecko data, ADA and SOL witnessed a significant drop in value. Each token lost 20% and 18% respectively. ALGO, MATIC, FIL, FLOW, BNB, SUI, and ARB also saw a dip in their prices, as investors grappled with the implications of potential regulatory restrictions.
Within days of the lawsuit, crypto traders had lost over $320 million in liquidations, according to data from CoinGlass. Meanwhile, trading app Robinhood announced it would cease its support for some of the crypto assets from June 27.
Development Companies Defend Token Status
While the SEC’s designation of these cryptocurrencies as securities has shaken the market, the development companies behind these assets have strongly rejected the regulator’s characterization.
Input Output Global, the company behind Cardano, refuted the SEC’s allegations. The firm said:
“Under no circumstances is ADA security under US securities laws. It never has been.”
Similarly, the Solana Foundation disputed the characterization of SOL as security. The company further stressed its commitment to working with regulators in pursuit of regulatory clarity within the nation. On its part, Polygon Labs also noted that its actions had never specifically targeted the US, pointing to its global community in the process.
Following these clarifications, ADA, SOL, and MATIC all made a partial comeback, recovering some of the losses incurred in the past week. ALGO and FLOW also recovered over 12.5% and 10.5% respectively, to bring a smile to the faces of their holders. Bitcoin has also experienced an uptick in demand, asserting its market dominance, as the altcoins struggle.
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An experienced writer with practical experience in the fintech industry. When not writing, he spends his time reading, researching or teaching.
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