In June and November of this year, the SEC named several tokens, including SOL, ADA, MATIC, FIL, as unregistered securities, leading to a collapse in the altcoin market. With SOL breaking through $125 today, is this the biggest concern for Solana?
Summary:
SOL continues to rise, how much further can it go?
Background:
Will Solana surpass Ethereum’s market value? EON Capital: 80% probability within three years.
Table of Contents:
SEC named SOL, ADA, MATIC, FIL, etc. as securities
XRP’s victory brings a turning point
Will SOL continue to fall under the “boy who cried wolf” effect?
Today, the public chain Solana broke through $125, reaching its highest level in 20 months. However, do you remember? SOL was named an unregistered security by the SEC almost six months ago and in November, causing a daily drop of over 20%. If the SEC intensifies its crackdown, it may 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 also mentioned SOL, ADA, MATIC, FIL, and other tokens as unregistered securities, leading to a collapse in the altcoin market.
At that time, the cryptocurrency market was worried that Coinbase, Kraken, and other U.S. trading platforms, with stricter regulations, would have to decide whether to delist these tokens. Market makers in the U.S. would also be affected and may have to stop market-making for 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.
At that time, the SEC’s aggressive actions in June indeed caused panic and turbulence in the cryptocurrency industry. However, soon after, the legal battle between the public chain Ripple and the SEC regarding whether XRP tokens were securities received a major update in July. U.S. Judge Analisa Torres made a summary judgment, ruling in favor of Ripple and stating that Ripple’s sale of XRP through exchanges does not constitute a security.
This ruling directly weakened the SEC’s claim that almost “all tokens are securities,” and investors began to reassess the potential value and risks of various tokens in the market, rather than categorizing them all as securities.
In November, the SEC again filed a lawsuit against the cryptocurrency exchange Kraken, accusing it of operating a virtual securities exchange, broker, and clearinghouse without registering with the SEC. It also claimed that Kraken mixed customers’ crypto assets “with its own funds.” It is worth mentioning that the SEC once again mentioned 11 cryptocurrencies, including SOL, ADA, MATIC, as securities. However, the market seems to have become numb to the SEC’s position, and there has not been much turmoil.
Despite the potential selling pressure from FTX and the ongoing debate over “cryptocurrency securities” by the SEC, the price of the Solana (SOL) public chain has continued to rise, surging over 470% since mid-October. Whether it can continue to grow under the gradually clear regulatory pace in the United States remains to be seen.
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SOL