The US Securities and Exchange Commission has labelled 19 crypto tokens as securities. Crypto tokens are created by developers for use in DeFi, gaming and other applications. The designation is explicitly laid out in the SEC lawsuits filed against crypto exchanges Binance and Coinbase Global last week. The labeling prompted a sharp selloff in the tokens. The impact was immediate with the combined market value falling $23 billion since the SEC’s lawsuit against Binance was filed on June 5. Furthermore, broker Robinhood Markets Inc. removed three of the coins from its crypto trading platform and eToro stopped allowing US clients to open positions in some of them.
The 19 Tokens Hit in the SEC Lawsuit:
ADA: ALGO: ATOM: AXS: BNB: BUSD: CHZ: COTI: DASH: FIL: FLOW: ICP: MANA: MATIC: NEAR: NEXO: SAND: SOL: VGX
Summary of each of token labeled as securities by the SEC.
- ADA
- Native token of Cardano blockchain,
- Cardano created by Charles Hoskinson in 2015, is built on a proof-of-stake consensus protocol called Ouroboros.
- ADA has traded on the global Binance.com platform since November 2017.
- Fallen 20% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- ALGO
- Native token of the Algorand blockchain
- Protocol founded by Silvio Micali, a professor at the Massachusetts Institute of Technology and recipient of the Turing Award in computer science.
- The blockchain launched in 2019 and is used by some decentralized-finance apps that allow for peer-to-peer coin trading and lending.
- Fallen 21% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- ATOM
- Native token of the Cosmos Hub, a blockchain creation platform underlying a number of high-profile blockchains.
- Not as widely known as other blockchains such as Ethereum or Solana, a number of popular projects were built on its system including the Terra blockchain, which collapsed last year.
- Cosmos was introduced in 2016 by Jae Kwon and Ethan Buchman and an initial coin offering for ATOM was conducted in April 2017.
- Fallen 13% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- AXS
- Used as a governance token in Axie Infinity, a “play-to-earn” game launched in 2018 by Vietnam-based Sky Mavis Inc.
- Took off during the Covid-19 pandemic in countries such as the Philippines and became the world’s biggest blockchain-based video game.
- Market cap down to $562 million after Axie Infinity’s AXS token was cited in both the Coinbase and Binance suits.
- Fallen 27% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- BNB
- Native token of the Binance exchange as well as BNB Chain, a blockchain Binance started.
- BNB’s $15 million initial coin offering took place in 2017 and it became one of the biggest tokens by market value, as it is widely used across Binance’s ecosystem.
- Decentralized lending platform Venus accepts BNB as a collateral asset for borrowing other cryptocurrencies.
- Fallen 17% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- BUSD
- BinanceUSD is a stablecoin operated by New York-based Paxos Trust Co. under Binance’s branding, leading the SEC to include the token in its lawsuit.
- BUSD relies on a store of cash and cash-equivalent collateral to keep a one-to-one value with the dollar, and is the third-biggest stablecoin with a circulation of $4.6 billion.
- Down from a peak of more than $23 billion in November last year, with the market value collapsing after Paxos was ordered by New York’s financial regulator to wind down the product in February.
- CHZ
- Native token of the Chiliz blockchain, though it runs on Ethereum.
- Chiliz raised approximately $66 million in a 2018 offering of CHZ tokens.
- CHZ powers Socios, a sports fan engagement platform based in Malta that operates so-called “fan tokens” on behalf of major sports teams like FC Barcelona and Manchester City and Formula 1 team Aston Martin.
- Owners of CHZ can use it to buy fan tokens from Socios, which in turn allow them to vote in polls that can influence team decisions.
- Fallen 28% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- COTI
- Native token of the Coti blockchain. Coti is a a company co-founded by former HSBC Israel executive David Assaraf, aims to create a digital infrastructure for payments and enterprise tokens, according to its website.
- COTI started trading in 2019, has a market value of $55 million.
- Fallen 251% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- DASH
- Created in January 2014 and originally called Xcoin.
- The token is one of the most popular so-called “privacy coins”, whose technology makes it easier for users to obfuscate transactions.
- DASH is a fork of Bitcoin but not a proof-of-stake token like most of the tokens listed by the SEC
- Fallen 50% since mentioned in the SEC’s lawsuit against crypto exchange Bittrex in April.
- FIL
- Native cryptocurrency of the Filecoin blockchain, which lets users store files on a distributed network of computers.
- The token was created by San Francisco-based Protocol Labs Inc., part of a YCombinator program and helmed by Stanford alum Juan Benet and launched in the fall of 2020.
- Fallen 19% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- FLOW
- FLOW was specifically designed to run games and NFT apps cost-effectively.
- The token is tied to the Flow blockchain, launched in 2020 by Canada-based game developer Dapper Labs, which is known for titles like CryptoKitties and nonfungible tokens NBA Top Shot.
- Fallen 26% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- ICP
- Native token of the Internet Computer Protocol
- The protocol was founded by Swiss startup DFINITY Foundation in 2016 and has raised funding from investors including a16z, Polychain Capital and Multicoin Capital.
- It aims to offer a decentralized alternative to internet cloud providers.
- The token has a market cap of $1.6 billion.
- Fallen 13% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- MANA
- MANA tokens can be used to purchase parcels of “land” in Decentraland and currently have a total market value of $617 million.
- Decentraland is a browser-based virtual reality platform, launched in 2020 through an entity called Metaverse Holdings.
- Fallen 25% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- MATIC
- Polygon was originally called Matic Network, but was rebranded in 2021.
- Native token of the Polygon blockchain created by Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, and launched in 2017.
- The Polygon network is an Ethereum-based scaling platform designed to allow developers to build decentralized applications with low transaction fees, according to its website.
- Fallen 22% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- NEAR
- Native token of NEAR, a decentralized blockchain platform that supports a variety of applications such as peer-to-peer lending projects.
- The NEAR platform was launched by Switzerland-based nonprofit entity NEAR Foundation and officially went live in April 2020.
- Fallen 20% since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- NEXO
- Native token of European crypto exchange, lending and payments firm Nexo Inc.,
- The initial offering of NEXO raised $52.5 million in 2018.
- Nexo pays its users varying interest rates based on how much NEXO they own and invest on its platform.
- Nexo settled with the SEC and several US states in January over its crypto lending activities.
- Largely unchanged since mentioned in the SEC’s Binance lawsuit according to CoinMarketCap.
- SAND
- SAND is based on Ethereum and used in The Sandbox, a blockchain-based metaverse where players can create avatars and own virtual land.
- Pixowl Inc, a startup founded by Arthur Madrid and Sebastien Borget, created The Sandbox and was purchased by blockchain gaming conglomerate Animoca Brands in 2018.
- Animoca co-founder Yat Siu told Bloomberg in October that The Sandbox had more than 200,000 monthly active users.
- Fallen 30% since mentioned in both the Coinbase and Binance complaints.
- SOL
- Native token of the Solana blockchain, which was developed by Solana Labs, a startup founded by Anatoly Yakovenko and Raj Gokal in 2018.
- Solana is often billed as a faster, cheaper alternative to Ethereum, but has been plagued with network blackouts since it launched.
- The blockchain also received support from Sam Bankman-Fried, the former CEO of bankrupt crypto exchange FTX who is due to stand trial on a range of criminal charges later this year.
- Fallen 24% since mentioned in both Coinbase and Binance complaints.
- VGX
- Native token of Voyager
- Voyager was founded in 2018, and the token let users sell and buy crypto assets, as well as earn interest when participating in the Voyager Earn Program.
- One of the major crypto lenders that went bankrupt in last year’s market meltdown. The lender cited a default on a large loan made to crypto hedge fund Three Arrows Capital for its demise.
- Fallen 21% since mentioned in the Coinbase suit.
Source: Bloomberg Cyberquant
From The TradersCommunity Research Desk