What happened
One of the most intriguing cryptocurrencies to track in recent days has been Aptos. This crypto project is known to be a layer 1 smart contract blockchain with very high throughput (similar to others like Solana).
For now, it has managed to evade the attention of the Securities and Exchange Commission (SEC), which announced two lawsuits last week claiming that a wide range of crypto tokens are, in fact, securities. This initially led to a sharp rise yesterday.
However, with concern spreading across the crypto industry that projects such as Aptos could be among the next in a long enough batting order for the SEC, this token gave up just about all of its gains. yesterday. So its 7.6% drop over 24 hours from 4 p.m. ET today effectively brings investors back to where they were before the closely watched SEC lawsuits.
So what
For now, the SEC's attention seems to be primarily focused on crypto exchanges and how digital assets are traded, sold, and held. This exerted disproportionate downward pressure on Coinbase, Binanceand other centralized and decentralized exchanges over the past week.
But in both lawsuits last week, the SEC specifically mentioned which tokens would be considered securities, raising the regulatory profile of those projects relative to the rest of the group.
Now what
Aptos is a top 50 crypto project, with a market capitalization of around $1 billion, so it wouldn't be surprising to see it finally get at least some of the attention its peers have received from regulators. . That said, the fact that Aptos has been able to bypass the scrutiny for now is great for investors.
Today's price action suggests that most crypto investors are taking a more cautious view of what the SEC's next steps will ultimately be. I expect to see a coordinated effort from the world-class talent backing many of the top crypto projects as the question of what defines a security is settled in court.
Aptos' fast and inexpensive Layer 1 network has gone unnoticed for some time, which has been positive and negative for investors, depending on the period.
For now, that could be a positive as the project's developer team looks to continue building its infrastructure and potentially gain market share on other litigation-burdened projects. I think that's a net positive, making today's decline less worrisome than it looks.