Cardano denies SEC’s ‘security’ claim as ADA bleeds
- Since the SEC’s accusation, the value of ADA dropped nearly 14%.
- The cohort of users holding between 1,000 – 1 million ADA tokens shrunk considerably over the week.
The recent blow by the U.S. Securities and Exchange Commission (SEC), labeling as many as ten cryptocurrencies as securities has plunged the market into a major crisis with FUD becoming the order of the day.
Read Cardano’s [ADA] Price Prediction 2023-24
On this list was Cardano [ADA], the seventh-largest crypto asset by market cap and one of the most popular smart contracts platforms.
Since the SEC’s accusation, the value of ADA has dropped about 14% as worried investors hurried to sell out their tokens for fear of it being obsolete in the future. Data from Santiment highlighted that trading volume surged significantly over the last few days.
Cardano stays firm
In what looked like an attempt to assuage ADA investors, Cardano developer Input Output Global (IOG) issued a detailed response to the regulator’s allegation. IOG referred to the SEC’s submission as having numerous factual errors and vehemently refuted all claims.
“Under no circumstances is ADA a security under U.S. securities laws. It never has been.”
IOG went on to call the action “regulation by enforcement” and questioned the agency’s clarity in understanding blockchain technologies.
Additionaly, IOG stated that it was prepared to engage with regulators to create a framework that protects consumers’ interests while fostering innovation in the Web3 sector.
Earlier, Cardano founder Charles Hoskinson responded to SEC’s action on crypto behemoth Binance. He called it an all-0ut attack on the existence of cryptos to create a system dominated by central bank digital currency (CBDC) and other central authorities.
With respect to Binance, I'm reading through the SEC complaint. It's over 130 pages, but seems like the next in a series of steps to implement chokepoint 2.0 in the United States. The end goal is a agenda based CBDC partnered with a handful of massive banks and end-to-end control…
— Charles Hoskinson (@IOHK_Charles) June 5, 2023
Whales lose faith in ADA
Cardano’s assurances may win back the confidence of investors. However, the situation at hand was not pretty.
Large addresses, especially, have offloaded their tokens en masse, as per latest stats from Santiment. The cohort of users holding between 1,000 – 1 million ADA tokens has shrunk considerably over the week as whales indulged in mass selling.
ADA gets support
However, long position traders ignored the negativity and continued to make bullish bets on ADA. As per Coinglass, the number of positions looking to profit from ADA’s price increase outnumbered those gunning for price losses.
How much are 1,10,100 ADAs worth today?
While this seemed counter-intuitive, it could be because many of these traders were convinced that the FUD was temporary.