Altcoins Dip Following Second SEC Lawsuit Against Crypto Exchange

The SEC's lawsuit against Coinbase named thirteen altcoins as securities.

AccessTimeIconJun 6, 2023 at 1:19 p.m. UTC
Updated Jun 6, 2023 at 5:40 p.m. UTC

Tokens listed in the U.S. Securities and Exchange Commission (SEC) lawsuit against U.S crypto exchange Coinbase (COIN) are tanking.

The SEC sued Coinbase on allegations of violating federal securities law, a day after filling a similar suit against Binance. The exchange’s shares tanked 20% in pre-market trading.

The tokens listed in the lawsuit are Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Sandbox (SAND), Axie Infinity (AXS), Chiliz (CHZ), Internet Computer (ICP), Voyager Token (VGX), NEAR protocol (NEAR), NEXO, FLOW and DASH.

Of the thirteen listed assets, VGX took the hardest hit, losing 3.25% in the last hour. Solana’s SOL also fell around 2%, and was also down 9% over the last 24-hours. Solana’s SOL was amongst the named tokens in Binance’s lawsuit on Monday. The Sandbox’s SAND, listed in both the Coinbase and Binance lawsuits, has lost 16% over the last 24 hours.

(Tokens listed in Coinbase lawsuit, Lyllah Ledesma/Messari)
(Tokens listed in Coinbase lawsuit, Lyllah Ledesma/Messari)

According to the SEC, Coinbase has operated as an unregistered broker, exchange and clearing agency simultaneously, arguing that it solicited customers, handled orders, allowed for bids and acted as an intermediary all at once. The SEC warned Coinbase earlier this year that it might sue the exchange, sending a Wells Notice, which Coinbase responded to in April.

In a comment to CoinDesk, Cardano Foundation CEO Frederik Gregaard said the organization "disagrees with the recent qualification of ADA as a security under US law."

"We look forward to the continued engagement with regulators and policymakers to achieve legal clarity and certainty on these matters," he said. "Meanwhile, we will keep contributing to the vibrant and diverse Cardano ecosystem.”

UPDATE (June 6, 2023, 17:39 UTC): Adds Cardano CEO comment.

Edited by Parikshit Mishra.


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Lyllah Ledesma

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.