In June and November of this year, the SEC named several tokens including SOL, ADA, MATIC, FIL, etc. as unregistered securities, leading to a collapse in the altcoin market. With SOL breaking through $125 today, could this be the biggest concern for Solana?
(Previous summary: SOL is unstoppable, how much higher can it go?)
(Background supplement: Will Solana surpass Ethereum in market value? EON Capital: 80% chance within three years)
Table of Contents:
The SEC has named SOL, ADA, MATIC, FIL, etc. as securities
XRP’s victory brings a turning point
Will SOL continue to fall with the “Boy Who Cried Wolf” effect?
The public blockchain Solana broke through $125 today, reaching a new high in 20 months. However, do you still remember that SOL was previously named an unregistered security by the SEC almost half a year ago in November, causing a decline of over 20% in a single day? If the SEC strengthens its crackdown, it could bring serious headwinds.
In June of this year, Binance was sued by the U.S. Securities and Exchange Commission (SEC), accusing it of violating up to 13 securities laws. The lawsuit against Binance also mentioned that SOL, ADA, MATIC, FIL, etc. were unregistered securities, leading to a collapse in the altcoin market.
Further reading: Market collapse! Bitcoin flash crashes, SEC securities coins all drop over 20%: ADA, SUI, AVAX, OP, TON…
At that time, the cryptocurrency market was concerned that Coinbase, Kraken, and other U.S. trading platforms would have to decide whether to delist these tokens as regulations became more stringent. U.S. market makers would also be affected and may have to stop market-making for certain tokens classified as securities.
When tokens lose liquidity, these altcoins may face further price declines, especially in the face of SEC regulatory uncertainty and potential legal consequences.
The SEC’s aggressive actions in June did indeed cause panic and turmoil in the cryptocurrency industry. However, soon after, the legal battle between the public blockchain Ripple and the SEC over whether XRP tokens are securities received a major update in July. U.S. Judge Analisa Torres made a summary judgment, ruling in favor of Ripple and stating that the sale of XRP through exchanges does not constitute a security.
Further reading: Ripple: SEC is a bully! “Selling XRP on exchanges is not a security,” symbolizing victory for the cryptocurrency industry
This ruling directly weakened the SEC’s claim that almost “all tokens are securities,” and investors began to reevaluate the potential value and risks of various tokens in the market, rather than categorizing them all as securities.
In November, the SEC filed another lawsuit against the cryptocurrency exchange Kraken, accusing it of operating a virtual securities exchange, broker, and clearinghouse illegally without registering with the SEC. It also claimed that Kraken mixed customers’ cryptocurrency assets “with its own funds.”
It is worth mentioning that the SEC once again named 11 cryptocurrencies, including SOL, ADA, MATIC, etc., as securities. However, the market seems to have become numb to the SEC’s position, and there has not been much turbulence in the market.
Further reading: SEC sues Kraken》Reiterates that SOL, ADA, etc., belong to securities
Despite the potential selling pressure from FTX and the pending “cryptocurrency securities debate” by the SEC, the price of the Solana (SOL) public blockchain has continued to rise by over 470% since mid-October. Whether it can continue to grow under the gradually clear pace of regulation in the United States remains to be seen.
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