Cardano (ADA) Drops as Markets Correct Amid Security Charges

Cardano (ADA) has emerged as one of the worst performers over the past few days, despite the rest of the market seeing some upside. This can be attributed to security charges from the United States Securities and Exchange Commission (SEC), a classification that has come down heavily on staking tokens over the past year.

Cardano Foundation denies security claims

in sec lawsuits This week has been operationalized against crypto exchanges such as Binance and Coinbase, with the SEC designating certain cryptocurrencies as securities in order to thwart the exchanges for trading unregistered securities.

One of the cryptocurrencies named is Cardano, a network that uses a proof of stake mechanism where users stake their native token, ADA, to help secure the network and are rewarded for it. Let’s earn ADA was named among a list of other tokens including MATIC, BUSD, BNB, FIL, SOL, SAND, ATOM, MANA, COTI, AXS, and ALGO. And despite this already long list, the SEC believes that more tokens qualify as securities in terms “including but not limited to”.

In light of this recent classification by the SEC, the Cardano Foundation has come forward to contest the regulator’s claims. one in do On its official page, the foundation expressed its disagreement with this classification and said that it looks forward to working with regulators.

“The Cardano Foundation disagrees with the recent qualification of ADA as a security under US law. We look forward to continued engagement with regulators and policymakers to achieve legal clarity and certainty on these matters,” the Foundation said.

ADA price falls to $0.33 | Source: ADAUSD on TradingView.com

ADA’s struggle continues

Despite the Cardano Foundation taking to Twitter to debunk the SEC’s claims of ADA being a security, the coin has not fared well in the market. The general market trend is correcting with bitcoin moving back above $26,000, while ADA remains stable.

Of the top 10 largest cryptocurrencies by market cap, ADA is currently the worst performer of the bunch. While Bitcoin and Ethereum are seeing gains of around 3% at the moment, Cardano’s token is losing 3.6%. Its performance on the weekly chart is even worse, down 9% in seven days.

ADA’s performance is not out of the ordinary as such classification has put selling pressure on the digital asset. Investors are understandably offloading some of their holdings for fear of further legal action from the SEC. However, there is no indication as to what the regulator is planning to do against digital assets classified as securities.

At the time of writing, ADA is changing hands at a price of $0.3406, bringing its total market cap to $11.89 billion.