(Bloomberg) – Smaller coins led to a selloff in crypto as a Securities and Exchange Commission crackdown on major digital asset exchanges unnerved investors.
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Tokens including Solana, Cardano, and Avalanche posted double-digit percentage declines on Saturday. Bitcoin and Ether, the two biggest digital assets, slid more than 3% as of 2:30 p.m. in Singapore.
Earlier this week, the SEC dealt a double blow to the crypto sector by launching lawsuits against Binance Holdings Ltd., the industry’s largest trading platform, and Coinbase Global Inc., the largest exchange in the United States. .
The SEC has accused Binance and its founder Changpeng ‘CZ’ Zhao of mismanaging client funds, misleading investors and regulators, and violating securities rules.
Binance called the SEC’s action “disappointing,” saying it had engaged with the agency in good faith negotiations to settle the matter. The company said it intends to defend its platform “with vigor”.
Coinbase disputed the SEC’s allegation that it is running an illegal exchange and said it was ready to take the legal fight all the way to the Supreme Court.
As part of the lawsuits, some tokens were flagged as unregistered securities, such as Binance’s BNB, Cardano’s ADA, and Solana’s SOL, among others. Such a designation comes with strict investor protection rules and could make the tokens more difficult to trade if exchanges are reluctant to list them for fear of falling under the SEC.
Robinhood Markets Inc. has announced that it will discontinue Solana, Cardano and Polygon starting June 27.
The BNB token, which can be seen as the arbiter of sentiment towards Binance, fell almost 10% at one point on Saturday before paring some of the decline.
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