- Algorand (ALGO) and Flow (FLOW) hit all-time lows last week
- SEC has argued that ALGO should be classified as a security based on an alleged unregistered securities offering conducted by the Algorand Foundation in 2019.
The cryptocurrency market experienced a significant downturn over the weekend as the U.S. Securities and Exchange Commission (SEC) took official action against two of the world’s largest exchanges and identified several cryptocurrencies as unregistered securities.
This move has cast doubt on the regulatory status of numerous altcoins, leading to a widespread decline in their values. Notably, Algorand (ALGO) and Flow (FLOW) hit all-time lows, intensifying concerns among investors.
According to CoinGecko, Algorand and Flow were traded at $0.098 and $0.459, respectively, on Saturday. These prices marked a substantial drop of over 60% from their respective highs of $0.29 and $1.39 in February.
The past week saw a further decline, pushing both coins to record lows, with Algorand and Flow experiencing a slump of more than 28%. However, since then, ALGO has recovered by over 12.5%, while FLOW has shown a slight rebound of just over 10.5%.
Algorand’s inclusion in the SEC’s lawsuit against Binance drew attention, while its initial mention came in the agency’s April lawsuit against Bittrex. The SEC has argued that ALGO should be classified as a security based on an alleged unregistered securities offering conducted by the Algorand Foundation in 2019.
The foundation refuted this classification, emphasizing the need for clear regulatory guidelines to advance the crypto industry. Presently, the majority of ALGO holders are facing losses, with only a handful of addresses showing gains.
Flow, on the other hand, was labeled a security by the SEC, with a focus on Dapper Labs, the Canadian company behind the Flow blockchain. The SEC claims that Dapper Labs played a crucial role in the growth and appreciation of FLOW’s value, as it is used for staking, transaction fees, and the trading of digital collectibles on the Flow network.
“Given that FLOW are required to interact with the Flow blockchain, the demand for and the value of the FLOW token would increase as a result of Dapper Labs’ and the Flow development team’s efforts to develop the Flow blockchain network,” SEC lawsuit against Coinbase reads.
The SEC’s actions have triggered a broader sell-off in the cryptocurrency market, impacting leading altcoins like Polygon (MATIC), Solana (SOL), and Cardano (ADA), which have also experienced significant declines. The regulatory uncertainty surrounding these cryptocurrencies has raised concerns among investors, leading to a cautious sentiment within the market.