MATIC faces long-term backlash as SEC claims it’s a security

MATIC is currently facing increased uncertainty as it officially classified As a security by the US Securities and Exchange Commission, as revealed in a recent filing against Binance.

As a result, the Polygon blockchain token experienced a significant drop 31% within a week, setting a new record. However, there is some positive news as it has managed to recover, having seen a jump of over 11% in the last 24 hours.

Source: Coingecko

L2 coins will be the next bullrun coins. Already knew, already confirmed.$sol $ada $matic And the other L1 has got the security seal. Regulation will be tighter = tighter choice of L1/L2 coins. Where will all this money go? pic.twitter.com/jw5xpLRA4j

– Zoomer Oracle (@ZoomerOracle) June 5, 2023

MATIC is one of 13 tokens within the Binance lawsuit to be named as a security. Polygon Labs, MATIC’s developer, issued a statement on Twitter defending Polygon, stating that the network is “developed outside the US, deployed outside the US, and is committed to supporting the network to this day.” The focus is on the global community of

This was the recent lawsuit against Binance chase In the SEC’s lawsuit against Coinbase, citing that the company is operating an unregistered exchange in connection with the company’s staking service.

Fear, uncertainty and doubt in the market

With the recent classification of many cryptocurrencies as securities, there has been a significant drop in the market within the past week. bitcoin, top cryptocurrency, received Dominance in light of recent regulatory filings against Binance and Coinbase.

other tokens in List are SOL, ADA, FIL, ATOM, SAND, MANA, ALGO and COTI. According to the lawsuit, the token is listed as an investment contract. it labeled the SEC as securities according to their how testWhich is a test to know whether a certain asset is a security or not.

MATIC market cap at $5.8 billion. Chart: TradingView.com

The SEC’s move was in line with its recent actions against the crypto industry. This February, the regulatory body cracked down on Kraken’s staking service as well as forced the company to pay $30 million in penalties for the violations.

If the mentioned tokens and companies fail to comply with the SEC, it could lead to another Ripple-like event that will affect the market.

MATIC bulls should watch this level

At the time of writing, MATIC is taking support at the $0.6 price level which will act as a launch pad for future upside moves. However, external market forces still dominate the momentum and price action of the coin in the near future. Recent lawsuits have already caused investors millions in losses on millions of potential gains.

Source: Coinglass

During this, coinglass The data shows that MATIC long positions were liquidated as the market declined after the lawsuits were made public.

Nevertheless, the buying pressure continued after the crash and MATIC bulls held the $0.6 support. If they can hold this support, we could see a return to the $0.83 support in the medium to long term.

Featured image from The Daily Hoddle