SOL, ADA, MATIC Tokens Slide 20% in Sudden Move Days After SEC Lawsuit Allegations

Tokens of major blockchain networks slid more than 20% in the past 24 hours amid a likely risk-off event days after 13 tokens were alleged as securities in a U.S. Securities and Exchange Commission (SEC) lawsuit against crypto exchanges Binance and Coinbase.

The bulk of these losses came in the wee hours of Saturday, data shows. Solana SOL$137.60, MATIC$0.1245 and ADA$0.4372 fell as much as 25% within hours – leading some on Crypto Twitter to wonder if a major crypto fund sold their holdings amid rather illiquid market conditions.

Such moves pushed weekly declines for these tokens to as much as 34%, the data shows.

As such, major tokens such as bnb BNB$907.39, DOGE$0.1421, XRP$2.0917 fell over 11%. Bitcoin BTC$90,873.03 dropped 3.6% while ether ETH$3,132.36 slid 4.5%.

Crypto-tracked futures saw nearly $300 million in liquidations in the early hours on Saturday, data from Coinglass show, exceeding the nine-month record liquidation figures from earlier this week.

Crypto liquidation refers to the process of forcibly closing a trader's positions in the cryptocurrency market. It occurs when a trader's margin account can no longer support their open positions due to significant losses or a lack of sufficient margin to meet the maintenance requirements.

Earlier this week, the SEC identified tokens issued by foundations and companies or tied to protocols MATIC$0.1245, Sandbox (SAND), Filecoin FIL$1.4979, Axie Infinity (AXS), CHZ$0.03135, FLOW$0.2174, ICP$3.4941, NEAR$1.7807, Voyager (VGX), Dash DASH$48.35 and NEXO$0.9832 as securities.

This has led to some major retail trading avenues such as Robinhood to end support for tokens ADA, SOL and MATIC, likely as a response to the regulatory filings.