(Bloomberg) — Smaller coins sank in a sharp crypto market selloff as a Securities and Exchange Commission crackdown on key digital-asset exchanges unnerved investors.

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Cardano’s ADA tumbled as much as 25% on Saturday before paring a sliver of the decline, while tokens including Solana’s SOL, Polygon’s MATIC and Avalanche’s AVAX posted double-digit percentage drops.

Bitcoin, the largest digital asset, slid about 3% as of 10:20 a.m. in London. Second-ranked Ether shed 5.6% to hit the lowest level since late March.

The SEC earlier this week roiled the crypto sector by launching lawsuits against Binance Holdings Ltd., which provides the sector’s largest trading platform, and Coinbase Global Inc., operator of the biggest digital-asset exchange in the US.

The SEC accused Binance and its founder Changpeng Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules. Binance has called the SEC action “disappointing” and said that it intends to defend its platform “vigorously.”

Coinbase has disputed the SEC’s allegation that it’s running an illegal exchange and said it’s prepared to take the legal fight all the way to the Supreme Court.

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Over a dozen tokens were flagged as unregistered securities in the lawsuits, including Binance’s BNB, Cardano, Solana and Polygon. The group as a whole was under pressure on Saturday.

SEC Scrutiny

While US regulators view Bitcoin as a commodity, SEC Chair Gary Gensler has long said most other tokens are subject to the agency’s investor-protection laws and that trading platforms should register with the regulator.

But labeling specific tokens represents a tougher approach, part of a clampdown on digital assets this year following a rout in 2022 and a series of blowups, including the bankruptcy of the FTX exchange.

A designation as an unregistered security could make tokens harder to trade if exchanges shy away from listing them for fear of irking the SEC. Robinhood Markets Inc. said Friday it will drop Solana, Cardano and Polygon from June 27.

The BNB token, which can be viewed as arbiter of sentiment toward Binance, lost about 5% to reach the lowest level since December last year.

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