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Is Solana under investigation?

Is Solana under investigation?

Solana’s (SOL) most recent crypto market moves have spooked investors as the cryptocurrency experienced a relatively sudden price drop of 24.84% in the last 30 days.

A possible explanation for the movements – which saw approximately $10 billion flee Solana’s market cap in the last week – came on June 24 when Crypto Bitlord, a prominent cryptocurrency influencer, made an X post claiming they heard rumors that SOL is under investigation.

The influencer noted: 

We are hearing rumors that $SOL is under investigation and a huge case is about to become public. This has been brewing for weeks now and couldn’t come at a worse time. If what we heard is true, start praying for Solana.

While the news that an agency such as the U.S. Securities and Exchange Commission (SEC) is investing a digital asset is hardly uncommon, the claim that ‘a huge case is about to become public’ paired with the recent price actions gave the claim significant gravitas.

Why Solana may be under investigation

The incredible volume of activity on the Solana blockchain – which saw more than 1 million new cryptocurrencies launched since April – provides no shortage of possible objects of the investigation, though SEC’s previous activities hint that it may be part of their long-standing efforts to determine whether various digital assets can be considered unregistered securities.

It is, however, worth pointing out that despite the Commission being the usual suspect, there has been no clear indication that Gary Gensler’s agency is the one building the ‘huge case.’

Additionally, while many of the recent projects on SOL have been legitimate, there has also been an apparent epidemic of illicit activity. 

LucieShib, a Shiba Inu (SHIB) marketing executive, recently warned on X that the deluge of celebrity accounts recently publishing Solana addresses is the result of said accounts being compromised and hijacked.

Whatever the ‘huge case’ may be – if it even exists – Solana’s recent price action has certainly frightened some traders and influencers have taken to proclaiming the death of SOL, arguing that ‘the Solana Foundation, under pressure from the Feds, are unable to deploy the algorithmic trading strategies to defend.’

Solana price chart

No matter how truthful the rumor may be, it is evident that recent weeks have brought a major change to Solana. After experiencing a massive climb since October 2023 and a period of relative stability since reaching yearly highs in March, SOL has entered a significant downtrend. 

Indeed, in stark contrast to its year-to-date (YTD) performance – which saw Solana rise 25.62% – the last 30 days of trading saw the cryptocurrency plunge 24.84% from $167 to $126.63.

SOL 30-day price chart. Source: Finbold

Additionally, the downtrend has reignited in the last 24 hours of trading as it saw SOL plunge another 4.85% after a period of relative stability in the last 6 days.

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