- Emerging ecosystem tokens experience a substantial decline in market capitalization.
- Messari’s data reveals the 30-day changes in market share for SOL and MATIC.
- SEC classification of SOL and MATIC as securities raise regulatory concerns.
Leading crypto market intelligence provider, Messari, highlights a significant drawdown in market capitalization for emerging ecosystem tokens following the U.S. Securities and Exchange Commission (SEC) filings against Binance and Coinbase (NASDAQ:COIN).
The market tracker cited the latest categorization of tokens like Solana’s SOL and Polygon’s MATIC as securities in the SEC. The tweet from Messari provided a graph displaying the 30-day changes in market share for several tokens, shedding light on the extent of the decline.
With the recent SEC filings against @Binance and @Coinbase , which cited numerous emerging ecosystem tokens such as @solana's $SOL and @0xPolygonLabs $MATIC as securities, emerging ecosystems have seen a roughly 25% drawdown in market capitalization. pic.twitter.com/8luWxoTaMh— Messari (@MessariCrypto) June 26, 2023
Binance Smart Chain (BSC)’s native token BNB, saw its market cap decrease by 23.3% during the 30 days. Polygon, an Ethereum scaling solution, experienced a more significant decline of 27.7%.
Other tokens that faced significant drawdowns included Solana (-21.9%), Avalanche (-18.9%), and Arbitrum (-9.3%). Interestingly, Optimism, a layer two scaling solution for Ethereum, bucked the trend with a notable increase of 43.5%.
The SEC’s identification of SOL and MATIC as securities in its filings sent shockwaves throughout the crypto market as it introduced additional regulatory requirements and potential constraints on its trading and issuance.
Illustratively, eToro, a social trading and multi-asset investment firm, withdrew support for four coins, including MATIC, Algorand (ALGO), Decentraland (MANA), and Dash (DASH).
From 6:00AM ET on Wednesday July 12th, 2023, US customers will no longer be able to open new positions in Algorand (ALGO), Decentraland (MANA), Dash (DASH) and Polygon (MATIC). Customers can continue to hold and sell existing positions in these coins. (2/5)— eToro US (@eToroUS) June 12, 2023
The consequent drawdown in market capitalization reflects the apprehension among investors and highlights the potential regulatory challenges emerging ecosystem tokens face as regulatory scrutiny intensifies in the crypto space. As Coin Edition recently disclosed, the court overseeing the Binance-SEC suit has asked the U.S. regulator to substantiate its claims against the Binance exchange.
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