In the recent week, digital tokens and NFTs faced significant setbacks as the SEC classified numerous ones as securities during its legal action targeting Coinbase and Binance, leading to their decline. Following the regulatory filings by the American authority, certain tokens now occupy the top ten positions in the list of biggest losers among the top 100 crypto tokens by market capitalization.
Chilliz (CHZ), Flow (FLOW), Axie Infinity (AXS), and The Sandbox (SAND) are among the tokens that witnessed approximately 25% losses over the course of a week.
The current state of the crypto market, particularly within the metaverse, is characterized by challenging times.
The SEC’s complaints targeting Binance and Coinbase included allegations that CHZ, FLOW, SAND, and Decentraland (MANA) were classified as securities. Although ApeCoin (APE) was not specifically mentioned in last week’s lawsuits, the SEC had previously initiated an investigation into its creators, Yuga Labs.
Coinciding with the introduction of Apple’s virtual reality (VR) and augmented reality (AR) headsets, the lawsuits emerged at an inopportune time for metaverse tokens. In January of this year, these tokens witnessed a notable upswing, exemplified by Decentraland’s MANA token skyrocketing by over 80% shortly after Apple’s initial indications about its headset intentions.
In a recent statement to the press, The Sandbox’s COO expressed disagreement with the SEC’s classification of SAND as a security, stating that they do not necessarily agree with it. On the other hand, Flow Blockchain tweeted this morning, expressing their support for a regulatory environment that provides clearer guidelines. They remain confident in the decentralization of FLOW tokens and emphasized that Flow is not only secure and accessible but also compliant.