Solana, Polygon, Cardano push back against SEC accusations

SEC named SOL, MATIC, and ADA securities in lawsuits against Binance and Coinbase last week. The tokens plummeted around 30%, but partially recovered following the foundations’ statements.

Solana, Polygon, and Cardano are among the most prominent tokens in the lawsuit, all of which are among the top 20 by market cap and collectively worth more than $21 billion, according to CoinMarketCap.

Cardano was the first to be defended by a founding organization, but Cardano founder Charles Hoskinson voiced support for Binance on Twitter when the first lawsuit was announced on June 5.

Related: SEC sues CZ and Binance for multiple securities violations

Input Output Global (IOG), the firm that created Cardano, released a statement on June 7:

The filing contains numerous factual inaccuracies and will not impact IOG’s operations in any way. Under no circumstances is ADA a security under U.S. securities laws…This latest filing from the SEC demonstrates that we still have a long way to go in this regard. Regulation through enforcement action does not provide either the clarity or certainty to which both the blockchain industry and consumers are entitled.

On June 10, the Solana Foundation also released a statement, but it was rather short and less confident compared to that of the IOG:

The Solana Foundation disagrees with the characterization of SOL as a security. We welcome the continued engagement of policymakers as constructive partners on regulation to achieve legal clarity on these issues for the thousands of entrepreneurs across the U.S. building in the digital assets space.

Polygon Labs’ statement, also released on June 10, didn’t say that MATIC isn’t a security. Rather, it focused on the utility of the token and that it was never intended for the U.S. market:

We are proud of the history of the Polygon network – developed outside the US, deployed outside the US, and focused to this day on the global community that supports the network. MATIC was a necessary part of the Polygon technology from Day 1… Given our focus on network security, we made sure MATIC was available to a wide group of persons, but only with actions that did not target the US at any time.

Following SEC’s lawsuits against Binance and Coinbase, Robinhood has decided to stop supporting Solana, Polygon, and Cardano. The trading app cited the lawsuits, stating that they have created uncertainty around these cryptocurrencies, as the reason.

On June 10, the prices of SOL, ADA and MATIC fell by up to 30%. At the time of writing, however, those tokens regained a little, according to Coingecko. SOL recorded a 2.2% increase, ADA a 3.5% increase and MATIC rose significantly by 5.5%. Analysis of futures data showed relatively low open interest and liquidations, suggesting that the upward movement was mainly driven by spot trading.