Investors of major tokens like Solana (SOL), Cardano (ADA), and Polygon (MATIC) witnessed a sigh of relief on Monday as their prices began to stabilize and reverse some of the losses experienced during the sudden sell-off over the weekend. According to CoinGecko, SOL rose 2.2%, ADA climbed 3.5%, and MATIC surged by 5.5%. Interestingly, futures data displayed relatively low open interest and liquidations, implying that spot trading primarily led this move.
The development foundations for these tokens independently issued statements that countered allegations from the US Securities and Exchange Commission (SEC). This pushback likely bolstered investor confidence, contributing to the tokens’ price recovery. The Solana Foundation claimed on Thursday that they do not regard SOL as a security, while some developers mentioned that they anticipate continued development on the Solana network. Similarly, on Friday, Cardano developer IOG stated that the SEC lawsuit featured “numerous factual inaccuracies” and asserted that ADA was never a security. Finally, Polygon Labs clarified on Sunday that MATIC had been developed and deployed outside the US and had not specifically targeted US customers.
Despite these assertions, these tokens and others, including Sandbox (SAND), Filecoin (FIL), Axie Infinity (AXS), Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP), Near (NEAR), Voyager (VGX), Dash (DASH), and Nexo (NEXO), were named by the SEC last week as securities. Additionally, the SEC accused major cryptocurrencу exсhangеs like Binance and Coinbase of multiple charges, such as providing unlicensed securities to US investors. These allegations led to a whopping 30% drop in the prices of the three tokens within hours on Saturday. On-chain data demonstrated millions of dollars’ worth of MATIC being transferred from trading companies Jump Trading and Cumberland to exchanges before the plunge, suggesting investors were offloading tokens mentioned in the SEC filings.
Although the market reacted negatively at first, the recent price recovery and token issuers’ statements have demonstrated some resilience in the face of regulatory challenges. It is worth noting that during the same tumultuous period, Bitcoin (BTC) and Ethereum (ETH) experienced only up to a 4.5% drop. Additionally, Bitcoin’s dominance rate, or share in the total crypto market capitalization, has been on the rise since early Saturday, reaching close to the 50% threshold for the first time since April 2021, as indicated by TradingView data.
Overall, the recent events have sparked renewed discussions and questions surrounding the classification of various tokens and the regulatory framework governing the crypto industry. Investors should remain vigilant and closely monitor these developments in order to make informed decisions in this ever-evolving landscape.
Source: Coindesk
