The Securities and Exchange Commission made waves this week by suing crypto exchanges Coinbase and Binance, and three tokens linked to popular Web3 experiences were caught in the crosshairs.
As part of the Binance and Coinbase suits, the SEC labeled several cryptocurrencies as securities, including SAND and AXS, the native cryptocurrencies, respectively, of The Sandbox metaverse and Web3 play-to-earn game Axie Infinity.
SAND fuels that metaverse’s in-game economy—it’s used to buy land and to interact with user-generated experiences on the platform—while AXS serves as a governance token that allows holders to vote on future changes to the game in addition to its role in Axie’s play-to-earn structure. AXS and sister cryptocurrency Smooth Love Potion, or SLP, are used in the game to to create more of the furry monsters called Axies used by gamers. AXS can also be used for staking and as payment within the game’s NFT marketplace, according to the game’s website. Users often convert SLP, which they earn for playing the game, to AXS to take their earnings out of the game.
MANA, the cryptocurrency tied to metaverse platform Decentraland, was designated as a security in the SEC’s lawsuit against Binance but not in the suit against Coinbase. The cryptocurrency is used as a governance token and to buy metaverse land in Decentraland.
Aleksander Leonard Larsen, cofounder of Axie Infinity parent company Sky Mavis, did not comment directly on the news but posted a tweet on Monday that emphasized the company’s resilience over the years.
Survived bear market 2018-2020
— Aleksander / Psycheout – Axie Infinity (@Psycheout86) June 6, 2023
Survived bear market 2022-2023
Survived an attack by North-Korea
Moisturized
In our lane
Building$axs pic.twitter.com/unWXfrLI0J
Sky Mavis and the Decentraland Foundation did not immediately respond to requests for comment from Fortune. A spokesperson for The Sandbox declined to comment.
As of Tuesday morning, SAND was down more than 15% over the past day, trading near 51 cents, while AXS had fallen more than 10%, to about $6.62, and MANA was down 14.5%, to about 45 cents.