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Metaverse tokens lead weekly crypto decline amid SEC’s securities allegations

This week, tokens related to digital worlds and NFTs experienced a significant decline after the SEC classified several of them as securities in its legal action against Coinbase and Binance.

One week after the American regulator filed the cases, certain tokens that were mentioned now make up the majority of the top ten losers in the top 100 crypto tokens on CoinGecko based on market capitalization.

Some of the examples are Chilliz (CHZ), Flow (FLOW), Axie Infinity (AXS), and The Sandbox (SAND). On a weekly basis, they experienced losses of approximately 25%.

The SEC claimed that CHZ, FLOW, SAND, and Decentraland (MANA) were securities in the complaints against Binance and Coinbase.

APE wasn’t mentioned in the lawsuits last week, but the SEC had already investigated Yuga Labs, the creators of APE.

The lawsuits arrived at a really bad time for metaverse tokens because they coincided with the release of Apple’s virtual reality (VR) and augmented reality (AR) headsets.
Earlier this year in January, the tokens based on metaverse experienced a surge. Tokens such as MANA from Decentraland increased by over 80% within a week after Apple hinted at news about its headset.

The lawsuit filed by the SEC has a significant impact on metaverse tokens.

The teams developing for the companies have denied the claims made by the American regulator.

Last week, The Sandbox’s COO expressed to the press that the company does not fully agree with the SEC’s classification and the labeling of SAND as a security.

This morning, Flow Blockchain tweeted that they are happy to have a regulatory environment with more clarity. They still believe that FLOW tokens are decentralized and are confident about it. They also said that Flow is not only secure and accessible but also compliant.

At the same time, a member of the Chilliz team stated on their Discord that “we don’t talk about legal issues concerning other parties, like Binance US / Coinbase.”

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About MahKa

MahKa loves exploring the decentralized world. She writes about NFTs, the metaverse, Web3 and similar topics.

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