In 2022, Polygon (CRYPTO: MATIC) was one of the hidden gems of the crypto market, primarily because its prospects were so tightly aligned with those of Ethereum (CRYPTO: ETH). Polygon is a scaling solution for the Ethereum blockchain, so it made perfect sense that any future growth in Ethereum as a result of The Merge system upgrade would also result in future growth for Polygon.
But it's been a different story entirely for Polygon in 2023, with the crypto token up less than 1% year to date. It might still be a top crypto by market capitalization, but there are plenty of reasons to be concerned right now. If you are thinking about buying Polygon, here's what you need to know.
The biggest issue facing Polygon right now is a potential regulatory enforcement action by the Securities and Exchange Commission (SEC). On June 6, the agency named Polygon as one of a handful of cryptos that the agency deemed "unregistered securities" being offered for sale on cryptocurrency exchanges Binance (CRYPTO: BNB) and Coinbase Global (NASDAQ: COIN). As might be imagined, the price of Polygon immediately fell by more than 20% as investors panicked.
Source Fool.com