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Solana, Polygon, Cardano, and other tokens being dragged into the court battles by the Security and Exchange Commission (SEC) have lost 15%, or $5 billion, off their collective market capitalizations, according to a Decrypt analysis of CoinGecko data.
On June 5 and June 6, the SEC filed lawsuits against Binance and Coinbase—two of the largest crypto exchanges in the industry. Among the charges leveled at the two exchanges were allegations they were selling unregistered securities. The industry wasted no time calling the declarations “pretty unfair,” But that hasn't stopped the tokens from taking some collateral damage.
According to the SEC’s lawsuits against Binance and Coinbase, a handful of cryptocurrencies were named, including: Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos Hub (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), and COTI (COTI).
On June 12, a week after the SEC lawsuits were filed, Messari Crypto published its Ecosystem Brief: Rollup Specialization report. Messari's emerging markets category, which includes many of the projects labeled securities by the SEC, showed a 25% drop since the lawsuits were filed. But a handful have already started to make a recovery.
Filecoin and Algorand are both within 2% of the market capitalizations they had when the lawsuits were filed. The Cosmos ATOM token has a 5% gap to close. The rest haven't been as lucky.
Binance has been suffering an especially harsh regulatory clampdown around the world, with authorities closing in on the platform in several countries. That's likely why its exchange utility token, BNB, has seen its market capitalization drop 21% in value, going from $47 billion to $37 billion since the SEC lawsuit was filed.
Charles Hoskinson’s Cardano also saw its market capitalization plummet. The 8th largest asset on Coingecko is currently trading at $0.29, with a market cap of $10 billion—down 17% from when the SEC lawsuits were filed.
Polygon has struggled the most to recover from the blow dealt by the SEC. Today it holds roughly $6 billion in market value, down 20% from the $8 billion market cap it had at the start of th emoney. The token, according to Coingecko, trades at $0.66 today.
Some assets marked by Messari as emerging tokens were not included in the SEC’s lawsuit, but still suffered losses.
Avalanche (AVAX), albeit one of the biggest winners in last week’s bullish rally, has seen its market cap drop roughly 6% since the lawsuits were filed and is currently sitting at $4.6 billion. Optimism (OP), on the other hand, shed 17.5% of its total market cap over the same period and was sitting at $855 million as of writing.
Keep in mind, however, that despite these important drops in token prices, the crypto market has been on a bullish rally over the past week. The BlackRock Rally, so-named due to the traditional finance titan’s filing for a spot Bitcoin ETF last week, pushed Bitcoin, the number one cryptocurrency, over $31,000 for the first time in months, raising the tide for the majority of tokens.