Crypto prices showed signs of stabilizing Monday after a sharp market sell-off last week sparked by lawsuits the U.S. Securities and Exchange Commission brought against Coinbase and Binance for securities violations.
Cardano's ADA coin was unchanged Monday, according to Coin Metrics, after briefly tumbling as much as about 17% over the weekend. Meanwhile, Solana's SOL is still down 6% and Polygon's MATIC is down by more than 2%. At one point over the weekend they fell about 17% and 20%, respectively. Binance's BNB token was relatively stable over the weekend but lost more than 3% Monday.
In the past week, several altcoins plunged by at least 15%. In the seven days ending June 9, Cardano's coin dropped 27%, Solana's lost 23% and Polygon's tumbled 24%. The BNB token fell more than 18%.
The SEC sued Coinbase and Binance last week, alleging both failed to register as an exchange, broker-dealer, or clearing agency and of selling unregistered securities. The agency named several coins it said could be deemed securities, including the Solana, Cardano and Polygon coins. On Friday, stock and crypto trading app Robinhood delisted the three.
In the case against Binance, it also accused the exchange and its CEO Changpeng Zhao of inflating trading volumes, diverting customer funds and misleading customers about its controls.
Meanwhile, bitcoin and ether hovered below the flat line on Monday.
"[Bitcoin's] decline was limited compared to others and the price has been supported by its February high," said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank.
"Bitcoin has been holding it together relatively well ... but it is in for a potentially quite precarious week as more bad news could come up anytime regarding SEC's legal action, and the wider financial markets brace for U.S. CPI and FOMC meeting," he added.
SEC Chairman Gary Gensler told CNBC in an interview, after the lawsuits had been filed, that "we don't need more digital currency."
"The investing public has the benefit of U.S. securities law. Crypto should be no different, and these platforms, these intermediaries need to come into compliance," Gensler added.
Gensler, who was appointed by U.S. President Joe Biden in 2021, has spent much of the past year cracking down on crypto firms and exchanges.
