Solano, Cardano and Polygon plunge nearly 30% as big firms dump holdings after SEC allegations

Solano, Cardano and Polygon plunge nearly 30% as big firms dump holdings after SEC allegations

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The price of tokens tied to some of the best-known blockchains plunged Friday days after the Securities and Exchange Commission declared them securities in complaints filed against coin base and Binance. While Bitcoin and Ethereum experienced only minor crashes, other well-known crypto projects took a beating.

As of Sunday night, the price of Solana’s SOL token is down nearly 30% over seven days, while Polygon’s MATIC token and Cardano’s ADA are down 28% and 29.5% over the same period. .

While cryptocurrency prices tumbled across the board following SEC complaints, falling last Monday and Tuesday, only on Friday did markets see a sell-off.

The cause of Friday’s drop appears to be a decision by some of the biggest crypto market makers and trading firms to divest their stake. a coin desk report pointed to tweets from analytics firm LookOnChain, which cited blockchain data to say that Cumberland-linked wallets, Jump Trading and Robinhood had dumped a large volume of tokens on exchanges.

The large holdings of these companies, combined with an illiquid trading environment following the SEC statement, likely led to an especially steep decline in prices. Meanwhile, Robinhood announced on Friday would remove from the list Solana, Cardano, and Polygon from their exchange as of June 27, another likely hit to their value.

Solana and Cardano are so-called Layer 1 blockchains, aiming to challenge Ethereum, while Polygon is a “sidechain” that helps process Ethereum transactions more efficiently. While they took the biggest price hit, other well-known blockchains also took a big hit in the wake of SEC complaints.

The seven-day price of tokens tied to Filecoin and Internet Computer, both of which are labeled as securities by the SEC, fell 26% and 24% respectively on Sunday. Meanwhile, a number of well-known older projects, notably Litecoin and Dogecoin, were not tagged as securities and have fallen by around 15%.

The crypto industry has long denounced what it claims has been a lack of guidance from the SEC when it comes to determining which blockchain tokens are securities. The matter is being monitored very closely. legal battle between the agency and Ripple, which is associated with the XRP token. A decision is expected as soon as this summer.

Bitcoin, which is down 4% over the past week, is the only token that the SEC has declared to be a non-security. Ethereum, whose legal status is unclear, is down 7%. The two tokens are by far the largest cryptocurrencies by market cap.

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