ADA falls amid market recovery and security accusations.

Cardano (ADA) is one of the worst-performing cryptocurrencies in the last 24 hours, despite the rest of the market showing some improvements. This poor performance is likely due to the security charges made by the United States Securities and Exchange Commission (SEC), which has cast a shadow over staking tokens in the last year.

Cardano Foundation Denies Security Claims

In recent SEC lawsuits against crypto exchanges like Binance and blockchain, the SEC has indicated that some cryptocurrencies are securities, in an effort to accuse the exchanges of unregistered securities trading.

One of the cryptocurrencies mentioned is Cardano, which uses a proof of stake mechanism where users stake their native token, ADA, to help secure the network and earn rewards for it. ADA is among a list of other tokens, including MATIC, BUSD, BNB, FIL, SOL, SAND, ATOM, MANA, COTI, AXS, and ALGO. Despite this already long list, the SEC seems to believe that more tokens qualify as securities, given the wording of “including but not limited to.”

In response to this recent classification by the SEC, the Cardano Foundation has come forward to challenge the regulator’s claims. In a tweet on its official page, the foundation expressed its disagreement with this classification and said it looked forward to working with regulators.

• Bitcoin retests moving average that marked major market bottoms.
• Bitcoin trades at a $2k premium on Binance.US.
• Polkadot metrics rise with project launches. Will this positively impact DOT price?

“The Cardano Foundation disagrees with the recent qualification of ADA as a security under US law. We look forward to the 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 Continues To Struggle

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. While the general market is on a recovery trend with Bitcoin moving back above $26,000, ADA has remained stagnant.

Out of the top 10 largest cryptocurrencies by market cap, ADA is currently the worst performer of the bunch. Where Bitcoin and Ethereum are seeing an upside of around 3% at this time, Cardano’s token is nursing 3.6% losses. Its performance is even worse on the weekly chart with 9% losses in seven days.

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

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!