The US Securities and Exchange Commission (SEC) this Monday filed 13 lawsuits against Binance and its CEO, Changpeng Zhao (5). Moving on, the 136-page submission lists 10 cryptocurrencies that were considered securities.
Therefore, while the entire market is already operating in a bear market, including Bitcoin, it is possible that such cryptocurrencies will suffer even more from regulatory pressure.
In addition to these 10 cryptocurrencies, Binance Coin (BNB) and Binance USD (BUSD), created by Binance, have also been extensively analyzed by the SEC and also labeled as securities.
Solana (SUN)
While the SEC has no authority to regulate cryptocurrencies that are commodities like Bitcoin, everything changes when they are considered securities.
In the lawsuit, the SEC alleges that Binance offered various securities disguised as cryptocurrencies.
First up is Solana (SOL), which is already under pressure from its ties to bankrupt brokerage firm FTX. According to the SEC, SOL was created by Solana Labs, has a staking system, and conducted a pre-sale to fund development costs.
Solana Labs has publicly stated that it will pool proceeds from the public and private sales of SOL into cryptocurrency wallets it manages and use those proceeds to fund development, operations and marketing efforts around the Solana blockchain to attract more users. pulling for this blockchain.”
Following the SEC lawsuit over Binance, which Solana was named after, SOL is trading 10.3% lower and trading below $20.
Cardano (ADA)
Another giant, seventh-largest cryptocurrency in the market, Cardano is another one that has been deemed a security by the SEC. In addition to stating that it was created by Charles Hoskinson, it is also pointed out that the company Input Output Hong Kong (IOHK) is responsible for its development.
In other words, the SEC appears to be targeting cryptocurrencies owned by companies that profit from token presale and other common practices in the market. Like SOL, ADA also works with a stakeout system.
“These three entities (IOHK, Cardano Foundation, and Emurgo) used the proceeds from ADA sales to fund the development, marketing, commercial operations, and growth of the Cardano protocol.”
Following the SEC lawsuit over Binance where Cardano was cited, ADA is trading 7.6% lower and trading at $0.35.
Polygon (MATIC)
Polygon (MATIC), the second-tier solution to Ethereum, is another top 10 cryptocurrency in the market and is also listed as a security by the SEC.
“Since inception, the founders of Polygon have remained actively involved with Polygon through “Polygon Labs” (“Polygon”), an entity they also created for “the development and growth of Polygon.”
Like SOL and ADA, MATIC also works with a staking system, where investors can receive new coins by locking their own coins to validate transactions.
Another point mentioned is that Polygon sold 4% of the total coin supply during two closed investment rounds. Later, Polygon sold another 19% in an initial exchange offering (IEO) within Binance itself.
Following the SEC lawsuit over Binance where Polygon was cited, MATIC is trading 5.9% lower and trading at $0.85.
File currency (FIL)
This week Filecoin (FIL) introduced a collaboration in which its network would be used to store messages from aliens from Mars. However, the new news is not so pleasant for the project.
As with the other cases, the SEC alleges that FIL was founded by a company, Protocol Labs, which is raising funds through an initial coin offering (ICO) for the future development of the project.
After the SEC lawsuit over Binance where Filecoin was mentioned, FIL is trading 12% lower and trading at $4.19.
Axie Infinity (AXS)
After becoming one of the most famous cryptocurrencies in the market thanks to the game of the same name, Axie Infinity (AXS) has plummeted. The listing in the SEC lawsuit against Binance is also not good news.
As expected, the SEC claims that AXS was developed by one company, Sky Mavis. During investment rounds, part of these tokens have been sold to strategic investors.
Following the SEC lawsuit over Binance, which Axie Infinity was named after, AXS is trading down 6.8% to trade at $6.66.
The 5 other cryptocurrencies mentioned in the SEC proceedings
In addition to the previous five, five other cryptocurrencies were listed as securities by the SEC. Are they: Cosmos (ATOM), Sandbox (SAND), Decentraland (MANA), Algorand (ALGO) and Coti (COTI).
Cosmos (ATOM) is trading 7.17% lower and trading at $9.9. Sandbox (MANA) is down 7.47% and is trading at $0.53. Decentraland (MANA) is down 5.22% in the past 24 hours and is trading at USD 0.47.
Algorand (ALGO) and Coti (COTI) are already operating with lows of 9.4% and 9.26% respectively. Of the 10, nine are among the top 100 cryptocurrencies in the market. Here’s the list:
- Solana (SUN) — -10.3%
- Cardano (ADA) — -7.6%
- Polygon (MATIC) — -5.9%
- File currency (FIL) — -12%
- Cosmos (ATOM) — -7.17%
- Sandbox (SAND) — -7.47%
- Decentralized (MANA) — -5.22%
- Algorand (ALGO) — -9.4%
- Axie Infinity (AXS) — -6.8%
- Coti (COTI) — -9.26%
Ultimately, it is these cryptocurrencies that may be most harmed by the SEC lawsuit against Binance. However, despite the initial shock, it is still too early to know what the effects will be on the market.
Binance Coin (BNB) and Binance USD (BUSD) were also mentioned in the SEC filing
Two other cryptocurrencies listed as securities by the SEC were two owned by Binance itself. While Binance Coin (BNB) offers advantages within the exchange, Binance USD (BUSD) functions as a stablecoin.
As a highlight, the SEC analyzed Binance Coin’s (BNB) initial coin offering (ICO), as well as other plans such as burning and buying back BNB, which function as an alternative to paying dividends.
“From the time of the ICO to the present, BNB has been offered and sold as an investment contract and therefore as security.”
The fourth largest cryptocurrency in the market, behind only Bitcoin (BTC), Ethereum (ETH) and Tether (USDT), Binance Coin (BNB) lost 9% of its value this Monday (5) and is trading at US$278.
As for Binance USD (BUSD), while it has not lost value as a stablecoin, it is also considered a security by the SEC.
“Since its inception, BUSD has been offered and sold as an investment contract and therefore as security.”
Finally, in addition to the cryptocurrencies listed by the SEC, the industry as a whole is in decline. After all, Binance is the largest exchange and its issues can affect market volume and liquidity.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
