Upland: Berlin is here!

The aftermath of the U.S. Securities and Exchange Commission (SEC) lawsuit against major cryptocurrency exchanges Binance and Coinbase is beginning to spread to the market.

The lawsuit shocked the entire cryptocurrency market, implicating many tokens in the lawsuit as evidence that exchanges were trading cryptocurrency securities. Analyzing the performance of these tokens against Bitcoin since the incident was announced yields the following graph.

On June 6th, the tokens mentioned in the lawsuit started to fall, and on June 10th, the sale of most of the tokens accelerated.

Game-related tokens such as CHZ, SAND, MANA, FLOW, and AXS all recorded double-digit drawdowns of up to 28%.

The only token that managed to avoid the June 10th collapse was Nexo’s native token.

Binance Token Lawsuit
Source: TradingView

Tokens mentioned in one or both of the lawsuits include SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, NEXO, ATOM, SAND, MANA, ALGO, COTI. It was The chart below shows the token screener and its performance throughout 2023.

coinbase litigation token
Source: TradingView

Potential security token performance

Of all the tokens in the lawsuit, Nexo’s native token appears to have somewhat outperformed the others denominated in Bitcoin.

The token, which is used on the Nexo exchange to unlock higher yields and other features, has fallen just 5.19% over the last month. Moreover, it has fallen 40% since the beginning of the year and ranks sixth in the year-to-date (YTD) ranking of the tokens mentioned in the lawsuit.

Nexo will pull out of the US in 2022, citing “lack of regulatory clarity” as the main reason. The move does not necessarily mean that Nexo will be immune from prosecution by the SEC, and regulators will continue to take legal action against the company for past activities and ongoing violations involving US-based customers. This is because measures can be taken.

However, NEXO seems to have avoided a similar downturn affecting other tokens.

Cardano (ADA) has also shown resilience in the face of adversity, gaining 4.48% for the week, marking a slight recovery since the lawsuit. However, compared to monthly and yearly performance, Cardano suffered a -26.24% decline.

Additionally, Polygon (MATIC), Sandbox (SAND), Cosmos (ATOM), Decentraland (MANA), Algorand (ALGO), and Coti have all managed to regain some of their market share in the last seven days.

In particular, high-volume tokens on Binance, such as ADA and MATIC, seem to weather the storm better than low-volume tokens, such as FLOW.

Solana (SOL) traded -0.65% weekly as the price struggled to recover after the overall market decline. However, overall performance has been relatively stable this year, with a decline of only -1.18%.

Solana was also hit by the bankruptcy of FTX due to its relationship with the exchange’s founder, Sam Bankman-Fried, and SOL dropped more than 70% before slightly recovering. When the SEC lawsuit was announced, the price of SOL fell 91% from its all-time high and then dropped another 21.9%.

Additionally, tokens such as FLOW, AXS, and NEAR have faced more significant impacts and struggled to recover, with weekly volatility of -1.08%, -0.89%, and -0.34% respectively. These tokens have experienced significant declines in both monthly and yearly performance.

Looking at the data, it is clear that the lawsuit definitely affected the performance of the mentioned tokens. While some tokens are showing signs of recovery, others have been more severely affected and are struggling to regain their previous price levels.

broader impact

The SEC lawsuit has had a material impact on the cryptocurrency market across the broader cryptocurrency market, impacting tokens labeled as securities, leading to large-scale liquidations, and holding positions in the market. More than $200 million disappeared within an hour from the traders who were

The market capitalization of digital assets fell 2.87% to $1.12 trillion. Additionally, the cryptocurrency market saw net outflows of over $40 billion in the first 24 hours after the lawsuit was lifted, with all top 10 cryptocurrencies posting losses.

As the crypto industry continues to debate its next steps, the outcome of the SEC lawsuits against Binance and Coinbase will play an important role in shaping future market dynamics. The regulatory action and its impact on various tokens and exchanges remains unclear and attracts the attention of investors and industry experts.

Despite the initial turmoil, some tokens have shown resilience, highlighting their adaptability within the market. The long-term impact of the lawsuit on the cryptocurrency industry is yet to be determined.

*All figures are based on TradingView data as of June 12th.

Disclaimer: Nexo is an advertising partner of CrytoSlate.

By Jules

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