SEC's Securities Allegations Against Tokens Fail to Deter Investors

Published: November 21, 2023 at 4:27 am Updated: November 21, 2023 at 4:27 am

Edited and fact-checked:
November 21, 2023 at 4:27 am

In Brief

The SEC’s lawsuit against Kraken labels several tokens as securities, but market data reveals that many have achieved double-digit gains despite this classification.

SEC's Securities Allegations Against Tokens Fail to Deter Investors

The U.S. Securities and Exchange Commission (SEC) is intensifying its stance, alleging that certain cryptocurrencies operated by Kraken are securities. This legal action, however, hasn’t dampened the market’s enthusiasm for these tokens.

Despite the SEC’s repeated enforcement actions and allegations, several high-profile tokens like Solana’s SOL and Cardano’s ADA have seen impressive year-to-date gains, defying the regulatory pressure.

In the ongoing legal confrontation with Kraken, the SEC maintains that the exchange dealt in unregistered securities. The agency has explicitly named Solana and Cardano as securities in their legal filings. Surprisingly, market data reveals that these tokens, along with others like NEAR, have not only weathered the SEC’s allegations but have also outperformed Bitcoin in a broader market rally.

Solana’s SOL, in particular, has surged by nearly 463% year-to-date, reflecting strong investor confidence. This rally seems bolstered by positive comments from influential figures like ARK Invest’s Cathie Wood and substantial institutional interest as evidenced in Grayscale’s Solana Trust.

SEC vs Solana and Cardano

Cardano’s ADA has also risen by over 50%, buoyed by network upgrades and growing developer interest, despite a drop in active daily users. The NEAR token from the NEAR Foundation has similarly gained traction following its partnership with Nym Technologies, aimed at enhancing privacy features within its ecosystem.

However, not all tokens named by the SEC have experienced positive market trends. Some, like Cosmos’ ATOM, have seen a decrease, down by 4% year-to-date. This mixed response in the market underscores the complexity and varied impact of regulatory actions on different cryptocurrencies.

The SEC’s ongoing scrutiny over these tokens and Kraken’s operations highlights the ongoing tension between regulatory bodies and the crypto industry.

Despite this, the market’s response indicates a robust confidence in these digital assets, suggesting that technical capabilities and broader market dynamics might outweigh regulatory compliance concerns for many traders and investors.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master’s degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti