Why Did Cardano (ADA), Solana (SOL), and Polygon (MATIC) Prices Experience a Sharp Drop Today?

• Due to the recent actions of the US Securities and Exchange Commission (SEC) regarding assets that can be classified as securities, there is currently renewed uncertainty.
• Leading cryptocurrencies such as Cardano (ADA), Solana (SOL), and Polygon (MATIC) have experienced significant value losses that raise concerns about their long-term sustainability.
• The drop in asset prices occurred after the SEC filed two high-profile lawsuits against cryptocurrency exchanges Binance and Coinbase earlier this week.

Following the SEC’s actions against cryptocurrency exchanges, there have been significant drops in cryptocurrency prices. ADA, SOL, and MATIC have been particularly affected.

ADA, SOL, and MATIC Experience Sharp Declines

The cryptocurrency sector is currently facing renewed uncertainty due to the recent actions of the US Securities and Exchange Commission (SEC) regarding assets that can be classified as securities.

As a result, leading cryptocurrencies such as Cardano (ADA), Solana (SOL), and Polygon (MATIC) have experienced significant value losses that raise concerns about their long-term sustainability. In the last 24 hours, these three cryptocurrencies have experienced an average drop of 23%. Furthermore, a total capital outflow of $6.04 billion was observed in just one day.

For example, the ADA price is currently trading at $0.24, indicating a daily loss of 23.62%. Last week, this decentralized finance token experienced a drop of more than 35%.

Solana, which ranks 10th in terms of market capitalization, has experienced a 22.47% drop in the last 24 hours and is currently trading at $14.64. In the last seven days, SOL has experienced a drop of nearly 30%.

Similarly, Polygon, which is trading at $0.58, has lost 26% of its value in one day. Last week, its value dropped by more than 35%.

SEC’s Attack on Cryptocurrencies

The drop in asset prices occurred after the SEC filed two high-profile lawsuits against cryptocurrency exchanges Binance and Coinbase earlier this week. The lawsuit is related to the listing of unregistered securities.

According to the SEC, assets associated with foundations, companies, or protocols such as ADA, MATIC, and SOL should be classified as securities under regulatory laws.

Other affected assets include Sandbox (SAND), Filecoin (FIL), Axie Infinity (AXS), Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP), Near (NEAR), Voyager (VGX), Dash (DASH), and Nexo (NEXO).

In addition, the price drop has become even more complicated with Robinhood’s recent announcement. According to Robinhood’s announcement, ADA, MATIC, and SOL coins will be delisted from platforms on June 29.

Response from Cryptocurrency Companies

In addition, the foundations behind these three coins have denied the SEC’s claims. For example, the Solana Foundation has denied the idea that SOL is a security, emphasizing that it is a community project based on a decentralized project supported by users and developers. Similarly, Cardano’s developer company IOG has objected to classifying ADA as a security.

Binance also expressed disappointment with the SEC’s lawsuit in its latest blog post and emphasized its commitment to long-term and good-faith discussions to resolve ongoing investigations.

When a lawsuit is in the evaluation stage, companies usually either follow the settlement route or decide to argue the case in court.

A similar situation arose in December 2020 when the SEC filed a lawsuit against Ripple. The SEC claimed that the XRP token constituted an unregistered securities sale. This case is still ongoing, and the parties are waiting for a summary judgment.