Crypto prices stabilize after plunging on SEC crackdown jitters

Crypto prices are showing signs of stabilizing Monday after a sharp market sell-off last week sparked by the U.S. Securities and Exchange Commission suing Coinbase and Binance for securities violations.

Over the last 24 hours, some tokens have continued dropping but at a much slower pace, while some are recovering at single-digit percentages, signaling that prices are firming at the start of the new week.

Cardano’s coin, the world’s seventh most valuable cryptocurrency, rose more than 1% in the last 24 hours while Ripple’s XRP, ranked sixth, is up almost 1%, according to CoinMarketCap. Meanwhile, Binance’s BNB token and Solana’s SOL are still down 4% over the last day. Bitcoin and ether were relatively flat.

In the past week, four of the 10 most valuable coins plunged in value by at least 15%. Cardano’s coin took a massive beating in the last seven days, plunging more than 28%. Binance’s BNB token slid 25% and Polygon’s MATIC tumbled more than 29% in the same period.

The SEC sued Coinbase and Binance last week, accusing both of selling unregistered securities, among other charges. On Tuesday, the U.S. regulator alleged that Coinbase was operating as an unregistered exchange and broker, and that 13 assets listed on its platform were considered crypto asset securities. These assets included Solana’s SOL token, Cardano’s ADA and Polygon’s MATIC.

On Monday, it also accused Binance of inflating trading volumes, diverting customer funds and misleading customers about its controls, among others.

“Coinbase went to the SEC asking for clarity,” Dave Weisberger, CEO and co-founder of crypto algorithmic trading solutions provider CoinRoutes, told CNBC’s “Street Signs Asia” suggesting these firms were open to regulation from the authorities. “You have this asset class that is threatening to the oligopoly of the financial institutions worldwide,” he said.

The SEC Chairman Gary Gensler told CNBC in an interview, after the lawsuits had been filed, that “we don’t need more digital currency.”

“The investing public has the benefit of U.S. securities law. Crypto should be no different, and these platforms, these intermediaries need to come into compliance,” Gensler added.

Gensler, who was appointed by U.S. President Joe Biden in 2021, has spent much of the past year cracking down on crypto firms and exchanges.