SOL, ADA, and MATIC prices stabilize as foundations respond to SEC lawsuit allegations.
Investors who hold Solana’s SOL, Cardano’s ADA, and Polygon’s MATIC were impacted by a sudden sell-off over the weekend, but on Monday, they had a reason to celebrate as prices stabilized and some of the losses were reversed. According to data from CoinGecko, SOL rose 2.2%, ADA was up 3.5%, and MATIC surged 5.5%. Futures data showed relatively low open interest and liquidations, suggesting that the move was led by spot trading.
The development foundations of these tokens separately released statements in the past few days responding to allegations from the U.S. Securities and Exchange Commission (SEC), which likely boosted investor confidence. The Solana Foundation stated on Thursday that it did not consider SOL to be a security, and some developers said they did not expect development atop the Solana network to decline in the coming weeks. Elsewhere, Cardano developer IOG said on Friday that the SEC’s lawsuit contained “numerous factual inaccuracies” and that “under no circumstances was ADA a security.” On Sunday, Polygon Labs said MATIC was “developed outside the U.S., deployed outside the U.S.,” and “available to a wide group of persons, but only with actions that did not target the US at any time.”
Earlier last week, the SEC accused crypto exchanges Binance and Coinbase of multiple charges, such as offering unlicensed securities to U.S. investors and named alleged tokens to be securities. These tokens were issued by foundations and companies or tied to several protocols. 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 as securities.
On Saturday, the prices of SOL, ADA, and MATIC fell as much as 30%. On-chain data suggested that millions of dollars worth of MATIC were sent from trading companies Jump Trading and Cumberland to exchanges before the drop, suggesting investors were offloading tokens named in the SEC filings. As a result, bitcoin (BTC) and ether (ETH) fell only up to 4.5%, an unusual move at the time.
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Meanwhile, bitcoin’s dominance rate or share in the total crypto market capitalization rose early Saturday, nearing the 50% mark for the first time since April 2021, according to data tracked by charting platform TradingView.
Edited by Omkar Godbole.