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The U.S. Securities and Exchange Commission (SEC) has made headlines by filing a lawsuit against the popular cryptocurrency exchange, Coinbase, causing a harsh decline in the cryptocurrency markets.
Surprise Lawsuit for Coinbase!
In its lawsuit against Coinbase, one of the world’s leading crypto exchanges, the SEC alleges the company to have been operating as an unregistered broker. Moreover, the SEC has pointed out SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO as securities. Following the lawsuit, cryptocurrency markets exhibited an immediate reaction and turned towards a downtrend!
Bitcoin (BTC), the leading cryptocurrency, has seen a roughly 5% loss in the last 24 hours, being traded at $25,598 at the time of writing. The altcoins targeted in the allegations also experienced a drop averaging around 10%. The smart contract platform Solana (SOL), which was trading at about $22 prior to the lawsuit, shows a slight recovery and is now trading at $19.64. ADA, another altcoin under allegation, is trading at $0.3490, following an approximately 7% decline at the time of writing.
Historical Crypto Lawsuits!
On the other hand, legal developments similar to the Coinbase lawsuit in cryptocurrency markets have had negative effects and caused serious declines before. The legal updates involving Binance, the world’s largest crypto exchange by volume, were dragging the market down, while the effects of the recent incident on prices are not yet known. When historical data is taken into account, negative situations encountered by large crypto exchanges and companies have had significant impacts on price movement. For instance, last year’s collapse of the FTX exchange caused serious turmoil in the markets.
