ADA, SOL, MATIC Tokens Fall 20% Amidst SEC Lawsuit Allegations

In a recent development, a number of tokens have been accused of being securities, creating a sense of caution among traders and prompting a potential shift in market sentiment.

Over the past 24 hours, tokens from prominent blockchain networks have experienced a significant decline of more than 20%. This sudden drop comes in the wake of an event that heightened the risk-off sentiment, occurring just days after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against popular crypto exchanges Binance and Coinbase, alleging that 13 tokens are securities.

The majority of these losses were observed during the early hours of Saturday, as demonstrated by data. Notably, Solana (SOL), Polygon (MATIC), and Cardano (ADA) experienced a rapid decline of up to 25% within a short span of time. Speculation arose among Crypto Twitter users, suggesting that a major crypto fund may have sold its holdings due to the relatively illiquid conditions in the market. As a result of these developments, these tokens witnessed weekly declines reaching as high as 34%, according to the data.

Furthermore, other prominent tokens, including BNB, DOGE, XRP, BTC, and ETH, also suffered losses. BNB, DOGE, and XRP dropped over 11%, while BTC declined by 3.6% and ETH slid by 4.5%.

The impact of these events extended beyond token prices, as the futures market linked to cryptocurrencies experienced approximately $300 million in liquidations during the early hours of Saturday, surpassing the record liquidation figures set just days ago. Crypto liquidation occurs when a trader’s positions are forcibly closed due to significant losses or insufficient margin to meet the maintenance requirements of their margin account.

Earlier this week, the SEC identified several tokens, such as MATIC, SAND, FIL, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO, issued by foundations, companies, or tied to protocols, as securities. Consequently, major retail trading platforms like Robinhood responded to the regulatory filings by discontinuing support for tokens like ADA, SOL, and MATIC.

These recent developments have brought about a period of uncertainty in the cryptocurrency market, prompting traders to exercise caution and closely monitor the evolving regulatory landscape.

Read Also: Gary Gensler Affirms Existence of Deceptive Individuals, Scams, and Ponzi Schemes Within the Crypto Industry

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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