Ripple win over SEC brings relief to Solana after a quarter of bad news

Solana favorite for institutional investors
Key facts:
  • SOL’s capitalization was affected last quarter.
  • The number of validators in the Solana network decreased by 21%.

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A report shows how Solana was harmed by the lawsuit that the United States Securities and Exchange Commission (SEC) issued in June against Binance and Coinbase, affecting both the price of its SOL token, its market capitalization and the number of validators. of the network in the last quarter.

In this period, the price of SOL decreased by 9.2% compared to the quarter-on-quarter increase of the market in general, which was 1.3%, highlights the report prepared by the Messari firm.

This left the token to end the quarter as the 10th largest crypto asset by market capitalization, reaching $7.2 billion. However, the cryptocurrency’s market capitalization fell 9.2%, compared to the prior quarter of $7.9 billion.

Another aspect that was affected in the last quarter was the income obtained by Solana’s validators. These decreased 15%, due to the fact that the percentage of commissions paid by users fell.

Being a network that operates under the proof-of-stake (PoS) algorithm, it has validators that are the ones who verify the transactions of the network and get a reward for it.

Said participation in the network, although it remained stable during the second quarter, was 21% lower than that of the first quarter of the year, details the report.

The bad news also spilled over into the non-fungible token (NFT) market. According to Messari data, the sales volume of NFTs in the secondary market in dollars fell by 41.5%.

SEC complaint against exchanges capped a quarter of bad news

The fall in various aspects of Solana’s finances was marked by the lawsuit that the United States Securities and Exchange Commission (SEC) filed against the Binance and Coinbase exchanges. He accused them of negotiating with alleged unregistered securities, including SOL and 12 other crypto assets, as reported at the time by the Market Times.

A security is a financial instrument that represents the possession of a property or investment in a company. In the case of cryptocurrencies, assets that offer future profitability or voting power can be considered securities, according to the regulatory body. Any financial instrument that is classified as a security must receive authorization from the SEC in order to be traded.

Not everything is negative for Solana

To highlight as a positive aspect is the fact that the growth initiatives of the Solana Foundation continue to invest in the ecosystem. Includes those that make grants and a $10 million artificial intelligence (AI) fund.

Additionally, Solana may have seen a light at the end of the tunnel about the future of his crypto asset and how it is viewed by the US regulator.

Yesterday, July 13, a court in the United States ruled that Ripple’s XRP token is not a security. Therefore, the sale of the cryptoactive in exchanges and in the rest of the secondary market is allowed without the need for authorization from the SEC.

In this sense, Solana and other organizations can benefit from this ruling if it is considered a judicial precedent. It could be an argument to fight so that your tokens are no longer considered as securities by the SEC.

The court ruling in favor of Ripple positively affected the SOL token. In less than 24 hours, the price of the asset went from USD 21.7 to USD 27.9, which represents a growth of 29%, according to data from CoinMarketCap.