Following SEC Lawsuit Allegations, SOL, ADA, and MATIC Tokens Experience a 20% Drop in Value within Days.
Tokens from major blockchain networks experienced a sharp decline of over 20% in the past 24 hours, following the identification of 13 tokens as securities in a US Securities and Exchange Commission (SEC) lawsuit against crypto exchanges Binance and Coinbase. The losses were largely seen in the early hours of Saturday and were mainly due to illiquid market conditions, leading to speculations that a major crypto fund sold off its holdings. Solana (SOL), polygon (MATIC), and cardano (ADA) suffered the heaviest losses of up to 25%. This pushed their weekly decline to as much as 34%, with major tokens such as bnb (BNB), dogecoin (DOGE), and xrp (XRP) also falling over 11%. According to data from Coinglass, crypto-tracked futures saw nearly $300 million in liquidations in the early hours of Saturday alone, exceeding previous nine-month record liquidation figures seen earlier in the week. This has likely occurred due to traders’ margin accounts no longer supporting their open positions, leading to significant losses or a lack of sufficient margin to meet maintenance requirements.
Earlier in the week, the SEC identified tokens such as SAND, MATIC, and CHZ, among others, as securities issued by foundations and companies or tied to protocols. In response to the regulatory filings, major retail trading avenues such as Robinhood have ended support for tokens ADA, SOL, and MATIC.