Sign Up on MEXC
The United States Securities and Exchange Commission (SEC) has just declared a number of top digital currencies as investment contracts and as such, unregistered securities.
The claim was made by the US SEC in the recent charges filed against Binance Exchange and cryptocurrencies it listed including Binance Coin (BNB), Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS) and COTI.
Source: CNBC Television
More Crypto Lawsuits
Many hypotheses are ongoing in the industry following Binance crackdown and declaration with speculations of lawsuits similar to that of Ripple Lawsuit likely.
In a similar way, US SEC filed a lawsuit against Ripple calling XRP token an unregistered security. While, the main intention of SEC remains hidden, it is possible SEC may target parent companies holding these tokens similar to Ripple. While this assumption is hard to predict, here are three other possible aftermaths of this move by the SEC on the named assets.
Crypto Exchange Delisting in US
This is arguably one of the most troubling possible aftermath of the designation of the 12 digital currencies as securities. Exchanges operating in the United States which represents the most important market to date for crypto may start delisting the assets as they will not want to be caught in between the regulatory uncertainty.
Interestingly, these tokens are major digital assets with a significant number also trading on Coinbase, Kraken and other US-based trading outfits. With the SEC very bold about its stance, exchanges may take the initiative to delist the assets before they themselves are sued.
There is a precedence for this as many of the exchanges delisted XRP when the legal battle between Ripple and the SEC commenced back in December 2020.
Exit of Major Crypto Partners
The position of the US SEC to proscribe these cryptocurrencies as securities may also affect their partnerships moving forward. Many big brands that are exploring avenues to enter the Web3.0 world through partnerships with these major crypto projects are doing so with no potential regulatory baggage. With the SEC likely to go after these tokens individually in the future, most of these protocols may lose their partnerships in the near future.
Sustained Price Plunge
A sustained price plunge remains the first and most distinct impact of the securities designation on the aforementioned tokens. The news has riled up the tokens with BNB, the central crypto featured in the lawsuit dropping by 9.92% to $275.64.
All of the cryptocurrencies named have also recorded sustained price plunges with Cardano down by 8.06% and Solana down by 9.70%. Depending on the next steps from the market regulator, we may see a prolonged crypto winter for these digital currencies moving forward.
While this assumption is a mere speculation, the XRP case also served as a precedent when Ripple Labs lost its US payment partner Moneygram International at the time.
Conclusion
Changpeng “CZ” Zhao, the CEO of Binance has called for unity in the industry to help usher in a more functional regulation that can help power the crypto ecosystem in the US. With the exchange reiterating its plans to defend itself against the SEC’s allegations, market observers are currently staying safe and exiting their positions as showcased in the ongoing price slumps.
- “Bitcoin Is Topping Out” Before Fed Rate Cut Warns Peter Schiff
- Michael Saylor Credits Bitcoin for Strategy’s Outperformance Over ‘Mag 7’ Stocks
- XRP Overtakes Shopify, Verizon, Citigroup in Market Value as Price Eyes $6
- Altcoin Season Index Hits New High As ETH, SOL, DOGE, and XRP Rally
- ‘Huge Breakthrough,’ Peter Brandt Says as Dogecoin Reclaims $0.30 Ahead ETF Launch
- Bitcoin Price Prediction: Q4 Rally Looms as ETF Inflows Hit $642M—Analyst eyes $150K
- Pepe Coin Price Prediction as the Token Jumps Nearly 20% – Will Whale Accumulation Take it to $0.00003?
- Pi Coin Price Prediction As Adam & Eve Pattern Signals Breakout Rally To $0.45 Ahead
- HBAR Price Prediction Amid DTCC Listing and Archax Expansion — Is $0.50 Next?
- Ethereum Price Eyes a 40% Surge as Morgan Stanley Shifts Fed Cuts Forecast
